Preamble

The House met at half-past Two o'clock

PRAYERS

[Mr. SPEAKER in the Chair]

Oral Answers to Questions — TRANSPORT

Oil Conservation

Mr. Waller: asked the Minister of Transport what consideration he gives to the factor of oil conservation when judging the economic value of new road projects.

The Parliamentary Secretary to the Minister of Transport (Mr. Kenneth Clarke): Estimates of savings in vehicle operating costs, including fuel costs, are incorporated in the economic assessment. Both these and the underlying traffic estimates assume that fuel prices will increase in real terms in future. We therefore attempt to measure the oil savings which better roads can produce and anticipate the effects of higher oil prices in our road planning.

Mr. Waller: Does my hon. Friend accept that the present rapid increase in the price of oil strengthens the argument for new roads, bearing in mind that such new roads, especially those of motorway standards, tend to prevent stop-go motoring which uses more fuel?

Mr. Clarke: I entirely agree with my hon. Friend. That is a relevant factor that should be taken into account in connection with road planning. Traffic jams can be very wasteful of fuel. In all our transport planning we have to take account of the energy saving implications.

Mr. Anderson: On what assumptions are the Government working regarding the correlation between real increases in fuel prices and consumption?

Mr. Clarke: The fuel price forecasts that we are working on at the moment

allow for the crude oil price to treble between 1977 and 2000, and we try to make some assessment of the possible impacts of that on vehicle and road use.

Motorway Network

Mr. Roy Hughes: asked the Minister of Transport what is the likely effect of recent public expenditure cuts on the completion of the motorway network.

The Minister of Transport (Mr. Norman Fowler): The public expenditure and roads programmes are still under review, but the most urgent schemes should still be able to go ahead as soon as they are ready.

Mr. Hughes: Could the Government consider separate funding arrangements for the motorway network? In Wales, for instance, the completion of the M4 is gobbling up the bulk of road expenditure. If Wales is to have any future as a viable economy are there not certain road schemes that should be given the highest possible priority?

Mr. Fowler: I do not think that we could consider a new funding arrangement. Clearly the hon. Gentleman has a point for the Welsh Office. What I can say to the hon. Gentleman is that our road programme is very substantial and we have in mind the importance of the kind of road about which he is talking.

Mr. Kenneth Carlisle: In assessing his priorities for the road network, will my right hon. Friend bear in mind the need to provide bypasses for those cities that suffer acute traffic congestion, especially those that are important industrial centres which have—

Mr. Speaker: Order. I believe that the hon. Gentleman is anticipating someone else's question on the Order Paper concerning bypasses.

Mr. Fowler: I am well aware of the problems of the Lincoln bypass. All I say at this stage is that I have every sympathy and intend to place far more emphasis upon bypasses taking traffic away from the residential areas.

Mr. McNally: Is the Minister willing to fight within the Cabinet for the concept that if industrial regeneration and recovery is our ultimate objective the motorway system, particularly in areas


such as Greater Manchester, will play an important part and should not be chopped now for short-term reasons of expediency?

Mr. Fowler: I have great sympathy with the point put by the hon. Gentleman. Roads such as the M25 remain a very high priority as do other industrial routes. Indeed, our road building strategy is to put first emphasis on the regeneration of the economy.

Mr. Trippier: May I ask my right hon. Friend about his proposals for lighting all motorways? As motorists are now accustomed to travelling on unlit motorways, does he not agree that there would be significant savings in public expenditure if he were to remove the urgency of completing that programme and redirect some of that money, through the local authorities, into maintaining and repairing existing major or secondary roads, some of which are in an appalling condition?

Mr. Fowler: I have sympathy with the point about road maintenance. That is clearly something that we shall look at. We put lighting on the motorways only when we are convinced that the savings in terms of road accidents justifies it.

British Railways Board

Mr. Bagier: asked the Minister of Transport if he will relax the cash limits applied to the British Railways Board.

Mr. Fowler: I have no plans to change either the external finance limit for 1979–80 or the 1980 ceiling on the public service obligation grant.

Mr. Bagier: Is not the Minister aware that the cash crisis facing British Rail is now fairly desperate? Is he aware that British Rail has been forced to put a ban on recruitment in the next four weeks and to stop urgent repairs to the tracks? Will he not agree that the only alternative to lifting the cash limits is a further massive increase in charges, to which the public will react violently?

Mr. Fowler: I would not agree with the hon. Member on the last point. The British Railways Board has taken stringent measures, and I pay tribute to it for its ability to live within the cash limit. Measures such as these are what

it is all about—that is what living within the cash limits means.

Mr. Garel-Jones: Perhaps in the course of his next meeting with the British Railways Board—and I recognise that this falls slightly outside the context of the question—my right hon. Friend would raise the matter of the very serious train crash which took place in my constituency—

Mr. Speaker: Order. Perhaps the hon. Member could put that question under some other heading. He has, after all, drawn my attention to his misdeeds.

Mr. Spriggs: Is the Minister aware that the answer he has just given about the financing of British Rail simply will not do? Will he have another think about this because one of the greatest and most urgent needs at present is that of conserving oil and the best way to do that is to help British Rail electrify more and more lines?

Mr. Fowler: The cash limit that we are talking about is largely unchanged from that left by the last Government. Of course railway policy is important, but it cannot be insulated from the rest of the economy.

Mr. Michael McNair-Wilson: Will the Minister say whether, in imposing cash limits, he is giving the chairman of British Rail sufficient flexibility about the amount of the network that he must continue to run?

Mr. Fowler: If the point of my hon. Friend's supplementary question concerns rural services, I have made it abundantly clear to the chairman of British Railways that any option concerning the cutting of rural lines is not one that we would support. We believe that improvements are possible in the economics of British Rail and that the most important need is for improvements in productivity.

Mr. Booth: Has the Minister overlooked the fact that in its corporate review British Rail pointed out that the investment allocated to continuous welded rail was sufficient to support only 19,000 track miles? In view of the accident which has taken place as a result of a welding failure, will he at least reconsider how far this development will be limited by the decision that he has taken on British Rail finances?

Mr. Fowler: I shall certainly consider the arrangements for continuous welded rail but I am sure that the right hon. Gentleman would not want it to be thought that the cause of the accident was any lack of investment in the system at that stage. I do not believe that that is remotely the case. We have announced an inquiry on this matter, but the right hon. Gentleman's point was certainly not the explanation for the crash.

Mr. Garel-Jones: Following those remarks, will the Minister agree that tribute must be paid to people in my constituency, particularly those at the Watford general hospital, who admitted 45 people in one and a half hours, and also to the employees of British Rail and the local police who acted very promptly and very well in the circumstances? Will the Minister give my constituents an assurance that the findings of the inquiry will be published, and will he ensure that some thought is given to what might have happened had one of the trains carrying nuclear fuel waste been in the vicinity?

Mr. Fowler: I join my hon. Friend in paying tribute to the emergency services and the staff of British Rail. I have ordered a public inquiry into this matter and the results will be published. On the question of what would have happened had this been a flask train, I do not think that any risk to the public would have been involved.

Channel Tunnel

Mr. Whitehead: asked the Minister of Transport if he has now received the Cairncross report on the Channel tunnel; and if he will make a statement.

Mr. Ron Lewis: asked the Minister of Transport if he has now received the Cairncross report on the Channel tunnel; and if he will make a statement.

Mr. Fowler: Sir Alec Cairncross has given me his initial impression of the BRB scheme. Further work is in hand and I will make a statement as soon as possible.

Mr. Whitehead: Has the Minister gathered from this initial statement that a single-track tunnel of the type recommended would be a sound investment,

particularly as finance is available, both from the EEC and the money markets? Will he make a statement next Transport Question Time as we do not want waiting for Cairncross to become the parliament equivalent of waiting for Godot?

Mr. Fowler: I take to heart the point that the hon. Member makes and I shall consider whether a statement will be made at the next Transport Question Time. The whole point is that we have asked Sir Alec Cairncross to have a continuing look at whether the project, as at present conceived, is financially viable. That is what Sir Alec will do and that is the matter on which I await his advice.

Mr. Lewis: Is the Minister aware that a decision in favour of the Channel tunnel would give a great morale boost to a quarter of a million railway men and women? Will he accept that a Channel tunnel will be a considerable asset to the nation's export investment and to tourism?

Mr. Fowler: Obviously there are great advantages, but I am sure the hon. Member will agree that, if we are to have a Channel tunnel, it is important to get the right Channel tunnel. We are at a very early stage in our deliberations. The Government are certainly not committed to a Channel tunnel, and I ask the hon. Member to await my further statement.

Mr. Costain: Will the Minister make certain that the Cairncross report is available to the House before Transport Question Time so that we can ask intelligent questions about it?

Mr. Fowler: The purpose of what Sir Alec Cairncross is doing is to give personal advice to me as the Minister. His inquiry would not be considered to be a Royal Commission or anything of that kind. I shall wish to make a statement giving the maximum amount of advice to the House, on which the House can reach its own conclusions.

Mr. Dalyell: May I raise a question that was raised at the last Transport Question Time about the steel-using aspects of the Channel tunnel? Has the Minister looked at this matter?

Mr. Fowler: This is one of the things that we shall continue to look at. I hope


that the hon. Member will await my further statement.

Mr. Prescott: Is the Minister aware of the EEC documents on Community transport infrastructure projects, which was published in November? Is he aware that future rail projects do not include a Channel tunnel? Has he drawn this omission to the attention of the Council of Ministers and does he think that such a project is dependent on Community finances? Does "further work" mean another rail and road project?

Mr. Fowler: The short answer is that the infrastructure instrument is under discussion and has a long way to go. Clearly, European finance would be one of the points that we would have very much in mind. I hope that at some stage the Opposition Front Bench will make their position on the Channel tunnel unequivocably clear.

British Railways (Subsidiaries)

Mr. Anderson: asked the Minister of Transport what proposals he has received from the British Railways Board about the future of its subsidiary businesses.

Mr. Fowler: At my request, the Railways Board has made proposals to my Department for involving private capital in its subsidiaries. I have now asked it to examine the opportunities more widely, including the possibility of setting up a holding company. I am discussing this with the chairman.

Mr. Anderson: Does the Minister recognise that he has made a significant statement? Does he accept the fundamental difference between the involvement of private capital that he proposes and hiving-off? Will he give a clear undertaking now to the House that he will not sanction the hiving-off of valuable British Rail assets, such as the shipping and hotel interests, and that he does not see the arrangements he has outlined as a prelude to eventual hiving-off if the collaboration projects are successful?

Mr. Fowler: We are talking about the involvement of private capital in operations like hotels, Sealink and property. How that is arranged and organised is clearly a matter for discussion between myself and the chairman of the British Railways Board. I can certainly

give the hon. Gentleman an assurance on that point. Our belief is that this will provide better opportunities for the subsidiaries which. I believe, have not had those opportunities in the past, and also better opportunities for those people who work for them.

Mr. Bob Dunn: The House welcomes any proposals that will place British Rail on a stricter and sounder commercial basis, but does my right hon. Friend not agree that these proposals must make for greater efficiency? Does not he also agree that there must be greater efficiency in services for commuters, especially in the south-east area of Southern Region, which is currently experiencing a 70 per cent. decline in services leaving Londan stations for areas in the South-East?

Mr. Fowler: I agree with the hon. Gentleman's point about commuter services, although this does not strictly arise out of the issue of subsidiary businesses. The point my hon. Friend makes about the efficiency of subsidiaries does arise. It is one of the aims of any new arrangement that they should be more efficient and that they should have greater opporunities and a greater commercial future than they have at the moment.

Mr. Cook: Will the right hon. Gentleman give an undertaking that, if British Rail is successful in attracting private capital, that capital will be exempt from the financial external limits? Does he not appreciate that if it is not so exempt, the effect of attracting private capital will not increase the resources of British Rail by one quid but will merely result in a reduction in the amount of money it obtains from the public sector?

Mr. Fowler: I cannot give an assurance of the kind that the hon. Gentleman wants at a time when I am discussing the plans with the chairman. I believe that an arrangement of this kind gives, or would give, however organised—whether by a subsidiary grouping company or some other way—more commercial freedom to the subsidiary companies and, therefore, provide a better future for those working in them.

M6 (Barthomley Link)

Mrs. Dunwoody: asked the Minister of Transport what starting date he now


envisages for the Barthomley link from Crewe to the M6.

Mr. Kenneth Clarke: I must ask the hon. Member to await the forthcoming roads White Paper.

Mrs. Dunwoody: I thank the Minister for that forthcoming answer. As his right hon. Friend has taken my constituency out of the development regions, is he aware that we need this link desperately for our industrial development? Will the Minister do whatever he can to expedite the decision?

Mr. Clarke: I announced a preferred route for the Barthomley link in August last year after meeting a number of representatives of the area. We are now preparing the design of the preferred route and undertaking the necessary traffic surveys to support it. Work is proceeding and, when the White Paper emerges we shall be able to give an estimated date for its construction.

Port of London Authority

Mr. Moate: asked the Minister of Transport if he will make a statement on the future of the Port of London Authority.

Mr. Fowler: As I announced on 7 December, I have set a strict financial limit on the total of Government assistance to the authority. Subject to adjustments to cope with inflation and the latest forecasts, this is set at the level promised by the last Government.

Mr. Moate: Does my right hon. Friend realise that, in the town of Sheerness, we not only have a truly magnificent steelworks but an outstandingly successful port? Will he make it clear, or try and establish with the Port of London Authority, that the future of the PLA in no way includes any plans for taking over the Medway and the port of Sheerness?

Mr. Fowler: Yes, Sir. I am aware of the points that my hon. Friend rightly makes about the steelworks and the port of Sheerness. None of the proposals that we have made on the future of the port of London affects in any way the future arrangements for Sheerness.

Mr. John Carlisle: Has my right hon. Friend any information about present industrial problems in the Port of London Authority and whether he expects a settlement in the near future?

Mr. Fowler: As my hon. Friend knows, there is a strike, and the port at the moment, is at a standstill. I do not believe that it would be helpful, at this time, for me to comment on the strike at the port. I know that both management and unions are making efforts to solve the problems. I gather that a meeting is currently going on, organised by the Transport and General Workers Union, and that there is to be a further meeting on Friday. I would only say that I very much hope that this strike can be brought to an end. It is clearly doing no good at all to the future prospects of the PLA.

Driving Test Centres

Mr. Dover: asked the Minister of Transport how many new driving test centres he expects to open in the next 12 months.

Mr. Fowler: Most of the new examiners I am recruiting can be accommodated in existing centres. Some new centres will be required and I am discussing the provision of these with my hon. Friend the Minister for Housing and Construction.

Mr. Dover: Will my right hon. Friend say what are the limiting restraints on the provision of new test centres throughout the country?

Mr. Fowler: One of the limiting factors at the moment is budgetary. The second is finding sites for the centres. Using my hon. Friend's constituency as an example, there is no site suitable at present to house a new centre. We are hoping that one will be found. I pay tribute to the pressure that my hon. Friend has brought on the Government on this matter.

Mr. John Evans: Will the right hon. Gentleman tell the House how many of the new examiners that he hopes to appoint will be situated in the North-West of England, where the waiting list for driving tests is growing ever longer? Surely, some of the new centres should be situated in the North-West to alleviate the enormous backlog that exists.

Mr. Fowler: We are trying, clearly, to increase the number of driving examiners. There is a later question on the Order Paper about this matter. The average waiting time for driving tests in the North-West is 22 weeks. That compares with a national average that is four weeks longer.

Mr. Mudd: Will my right hon. Friend, in examining his policy towards the creation of further driving centres, bear in mind that it makes greater sense financially and that it is more convenient for additional inspectors to be appointed, wherever possible, to the existing centres rather than indulging in further proliferation of the rent, rates and acquisition costs involved in extending the network of test centres?

Mr. Fowler: That is a suggestion that we have taken very much on board. But the fact is that, in some parts of the country, it is impossible to find accommodation for the numbers that are needed to reduce the waiting list for driving tests.

Bypasses

Mr. Edwin Wainwright: asked the Minister of Transport how many English towns over 10,000 population do not have a bypass.

Mr. Kenneth Clarke: Of some 300 such communities served by trunk roads, nearly 200 are at least partially relieved of through traffic by specific bypasses or major new routes. We intend to make progress with as many urgently needed bypasses of this kind as our resources will allow.

Mr. Wainwright: Does the Minister realise that the nation deplores the attitude of the Government towards the maintenance of good roads throughout the country? Does he agree that, following a mild winter, compared with last year, the Government are feeling complacent? Is he aware that many villages throughout the country are shattered by what has happened to their buildings and houses due to the passage of heavy vehicles that should be carried on bypasses? Will he take some action?

Mr. Clarke: We are not complacent at all. We are continuing with a perfectly effective roads planning programme consistent with the resources that are

available. When the hon. Gentleman talks of a mild winter, he refers, presumably, to the fact that we shall not underspend so much this year on the trunk road budget. That, I believe, is because the roads programme is being managed more efficiently than under the previous Government.

Mr. Robert C. Brown: Will the Minister seriously reconsider the roads programme in the North East, bearing in mind the extremely heavy unemployment in that area? Will he consider bringing forward the date of the city western bypass, Newcastle, the western inner ring road and the Redheugh Bridge?

Mr. Clarke: We are considering ail those schemes in the context of the review now taking place. We shall produce a White Paper in April. I am aware of road needs in the North-East. All the schemes that the hon. Gentleman mentioned have been under consideration in recent months.

Mr. Booth: Does the hon. Gentleman recall that, only two days ago, the Ministry put out another press notice saying that the M25 would have the highest priority in the road programme during its construction and would have first call on the Ministry's finances for roads? How can he reconcile that with assuring my hon. Friend the Member for Newcastle-upon-Tyne, West (Mr. Brown) that the Newcastle schemes are being considered? Surely they are being considered only in a secondary way, after the Minister has determined his priority on the M25.

Mr. Clarke: We have always said that the M25 has the highest priority in our roads programme, and I reaffirm that. However, it does not take up all the available funds and we must consider a proper regional distribution of the remaining resources in drawing up the roads programme for the whole country.

Road Construction

Mr. Knox: asked the Minister of Transport how much has been spent on new road construction in the past two years; and how much he anticipates will be spent in 1979–80 at constant prices.

Mr. Kenneth Clarke: Expenditure on trunk and local roads in England was


£544 million in 1977–78 and £516 million in 1978–79. I expect £562 million to be spent in 1979–80. All these figures are at 1979 survey prices.

Mr. Knox: Does my hon. Friend agree that, despite the improvement in the current year, we do not spend enough on new road construction? Does he agree that if we are to have an efficient and internationally competitive economy we should spend a higher proportion of total public expenditure on new road construction?

Mr. Clarke: No part of transport expenditure can be immune from the present financial situation and the need to achieve constraints in public expenditure, but road programmes can have a part to play in the revival of our industrial manufacturing economy. We have maintained spending this year, and, indeed, we are slightly increasing it because we are not falling so far short of our plans as the previous Government always did.

Mr. Hardy: Does the Minister agree that, while he may be right to give some priority to new road construction, the condition of thousands of miles of existing roads in Britain leaves a great deal to be desired? Is he further aware that the backlog is mounting, and that it could be decades before we catch up?

Mr. Clarke: I do not agree that conditions are as bad as the hon. Gentleman claims, but I accept that many local authorities are not in a position to make economies on road maintenance and we therefore have to reflect that fact in the balance of resources distributed to the remainder of the transport programme. We have shifted some resources from trunk road building to trunk road maintenance because of the need to get maintenance on the faster roads with heaviest traffic up to the required standard.

Driving Tests

Mr. Viggers: asked the Minister of Transport what progress has been made in shortening the waiting period for driving tests.

Mr. Fowler: The key to shorter waiting periods is more driving examiners and we have recruited more than 250 since last May. Waiting periods are now beginning to come down, but I am determined to

bring about further improvements as quickly as possible.

Mr. Viggers: is my right hon. Friend aware of the widespread anger that the Government should allow a six-month delay in driving tests in an area that is meant to provide a monopoly service? Is he further aware that there is appreciation of his determined effort to reduce the driving test waiting times, unlike the previous Government who were complacent? Why is it not possible to recruit examiners—if not men, why not women?

Mr. Fowler: The waiting periods are coming down and have been reduced to an average of 26 weeks, though that is not remotely good enough. In my hon. Friend's constituency the delay is down from 19 weeks to 16 weeks, but obviously we want to make much more progress. My hon. Friend has put his finger on an important area where much more recruitment is possible, namely in getting more women into the service. I hope that more women will come forward.

Mr. Gummer: Can my right hon. Friend explain why the previous Government cut back on the number of driving examiners when it is a self-financing service? Are we not suffering now from that action?

Mr. Fowler: Indeed we are. It is one of the mysteries of the previous Government—though only one—why they did that. When I took over as Minister of Transport I inherited a waiting list of 800,000. That is why we have given priority to sorting out the muddle left by the previous Government.

Mr. Christopher Price: Is the Minister aware that his reference to 26 weeks puzzles me, since many of my constituents are having to wait much longer and my son has just been offered a test on 26 October? Why is the position in London worse than that in the rest of the country?

Mr. Fowler: Because the Metropolitan area is one of the most difficult areas in which to find driving examiners. The 26-week figure is only an average. I hope that in London, as elsewhere, we shall be able to improve the situation. What I said about seeking to recruit more women driving examiners has particular application in London.

M1

Mr. Bright: asked the Minister of Transport why work on the widening of the southern part of the M1 will not start this financial year as scheduled.

Mr. Kenneth Clarke: All action was suspended pending the resolution of a High Court challenge against the compulsory purchase order for the acquisition of the necessary land. The Department has very recently been notified that the challengers do not intend to proceed with their notice of motion. I am glad to say that we shall, therefore, shortly be able to invite tenders for the work. Unfortunately, there is not now time for the work to be started this financial year.

Mr. Bright: Given the amount of time and fuel wasted on that stretch of the motorway, will my hon. Friend ensure that work will not be delayed still further through lack of finance once the problems have been overcome?

Mr. Clarke: I am well aware of the time and petrol that I waste, as do many of my constituents, every time we drive to London.

Mr. William Hamilton: Go by train.

Mr. Clarke: Now that we finally have the legal problems cleared up, public expenditure restraints will not hold back the contract.

Mr. Dudley Smith: Is my hon. Friend aware that it is impossible to travel on the M1 without meeting a multitude of road works? Does he not think that a special effort should be made to put the premier road in Britain into working order, if only for safety reasons?

Mr. Clarke: About 15 or 20 years ago traffic demands in the neighbourhood of Watford were underestimated and the strength of the carriageway needed for modern traffic was underestimated. A great deal of work has to be done to get things in order and, as I indicated in reply to an earlier question, we are diverting some resources from new building to maintenance, in order to get the M I up to the desired standard.

Trunk Road Schemes

Mr. Lennox-Boyd: asked the Minister of Transport if he will make a statement

on the criteria which he is using in his review of trunk road schemes.

Mr. Kenneth Clarke: The criteria include economic return, importance to industrial traffic, environmental impact, how the schemes accord with the Government's regional policies, and the views of local people.

Mr. Lennox-Boyd: I thank my hon. Friend for his helpful answer. Bearing in mind that no Minister can ever be as generous with road expenditure as he would like, may I ask whether my hon. Friend can indicate that he will not be cheeseparing about the preparation pool, particularly when he considers the deserving cases of roads that lead to major industrial sites, ports and nuclear power stations such as the road from the M60 to Heysham?

Mr. Clarke: We shall look at any reasonable suggestions for additions to the preparation pool, but our immediate problem is the marshalling of priorities among the 400 schemes in the present road programme. I am aware of the pressure to trunk the route into Heysham, which my hon. Friend and others often press, and we shall look at any scheme that is put forward. I should not like to hold out any false hopes that there is a likelihood in the near future that national funds will be committed to the improvement of that local route.

Mr. Robert C. Brown: Given the Minister's own criteria, how can he justify abandoning the Dishforth-Leeds motorway link, which is essential for traffic travelling from the North-East to Lancashire?

Mr. Clarke: We have not abandoned it. We have abandoned the inquiry, which was too closely directed to improvements in the existing A1, which are the least important parts of the improvements needed there. We have every intention of proceeding as quickly as possible with the design of the new link from the M1 to the A1, and fresh proposals will be published as soon as possible indicating the route to the east of Leeds.

Mrs. Kellett-Bowman: Bearing in mind the criteria that my hon. Friend has just enumerated, does he agree that when the Government make a majority policy decision, for example to build a nuclear


power station, they should take more account of the impact that it will have on the citizens of the area and should will the means to make the project a success by providing proper access to it?

Mr. Clarke: I am aware that the new power station is a factor to be taken into account, and we look at all relevant factors in assessing how much a road is part of the national network. Essentially, the discussion is about whether it should be paid for as part of the national trunk road scheme or financed as a local authority scheme. We have to assess the needs of Heysham and that part of Lancashire on the basis of the same criteria that we apply to the rest of the country.

British Railways (Freight)

Mr. Hooley: asked the Minister of Transport what is the financial target for British Railways freight services in 1980–81.

Mr. Kenneth Clarke: We propose to announce a short-term financial target for the freight business very soon.

Mr. Hooley: Does the Minister agree that, whatever the financial target may be, the chances of achieving it will not be enhanced if British Rail goes ahead with its proposal to close the valuable trans-Pennine Woodhead line through the most modern rail tunnel in this country and cut out the modern marshalling yards at Tinsley?

Mr. Clarke: British Rail is still consulting about that proposal. Indeed, it has been consulting for months. As I have indicated in previous replies to the hon. Member and others, there is no ministerial role in the decision about the future of a freight-only line. It is modern, but it is electrified to a different system from the remainder of the electrified track. The future of the freight business depends in part on concentrating on the right traffic and the right facilities and altering the nature of the freight business to make sure that it matches its market more exactly.

Mr. Moate: Does my hon. Friend agree that there is no case for subsidising British Rail freight? Can he say whether the financial target will allow for freight to carry its fair share of track costs and also make a full return on capital?

Mr. Clarke: I accept what my hon. Friend says. There is no case at all for subsidising freight traffic. I cannot anticipate my right hon. Friend's announcement about the actual level of the financial target, but getting a proper return on the capital employed must be one of the criteria to be aimed at.

Mr. Leadbitter: The Minister says that a decision will be made soon on the financial target for freight. Will he acknowledge the need to listen to the views of hon. Members and those members of the trade union movement who are interested in transport, particularly in the trans-Pennine lines, before the target announcement is made? Talks have taken place but we have not yet made representations to him. Will the hon. Gentleman agree to listen to our views before the financial limits are announced?

Mr. Clarke: Yes.

Mr. Michael McNair-Wilson: In the context of British Rail freight services can my hon. Friend say how many section 8 grants are being processed by his Department.

Mr. Clarke: I cannot give an exact answer but section 8 grants are welcomed by my Department and are always granted in suitable cases. We have rejected only one application since we came to office.

Mr. Snape: Does the Minister agree that the subsidy now being paid to British Rail's main competitor the heavy goods vehicle—is totally unjustified in that those vehicles do not meet their full track costs? Why does he not behave as a true Tory and withdraw that subsidy as soon as possible?

Mr. Clarke: The aim is that all modes of traffic should bear their proper track costs and receive no subsidy from public funds. My right hon. Friend has already announced our intention to alter the rate of road vehicle excise duty on heavy goods vehicles as soon as legislative time is available in order to achieve that aim.

Motorways

Mr. Bevan: asked the Minister of Transport what proportion of roads expenditure in 1980–81 will be devoted to motorways.

Mr. Fowler: I must ask my hon. Friend to await the publication of the roads White Paper.

Mr. Bevan: Assuming that the White Paper will show a substantially reduced proportion compared with previous years will my right hon. Friend indicate what progress can be made towards completion of the essential strategic motorway programme in the West Midlands and especially of the M42?

Mr. Fowler: The M42 inquiry is going ahead. The West Midlands is already well served, as my hon. Friend knows. Clearly the needs of the West Midlands and other industrial areas will be kept in view when we publish the White Paper.

Motorway Accidents

Mr. Iain Mills: asked the Minister of Transport if he is satisfied with his Department's encouragement of measures to reduce the danger of accidents caused by lorry-induced spray on wet motorways.

Mr. Kenneth Clarke: We are continuing to look for more effective ways of reducing spray but there is no simple design solution. The only obvious but effective remedy is for for drivers of heavy vehicles to keep their speed down in wet weather and for other drivers to keep clear of them where possible and ensure that windscreen wipers are in good order.

Mr. Mills: Would my hon. Friend be prepared to consider some form of consultative document that would encourage vehicle and vehicle component design—particularly of tyres—so as to make some contribution to reducing vehicle-induced spray?

Mr. Clarke: A great deal of research is going on, using the Department's engineers, TRRL and Southampton university, into possible means of reducing spray from heavy goods vehicles. My hon. Friend has great expertise in the matter of tyres and I agree that improved tyre design would help. No design solution has so far been found but we are continuing to look for better methods.

Mr. Cryer: Has the Minister noticed this afternoon the stream of complaints about lack of maintenance on motorways, and the problems of heavy traffic? Is there not a case for subsidising British

Rail freight so that lorries can be taken off the roads and their loads carried by rail? We would thus conserve energy and at the same time preserve our vital rail network for the future.

Mr. Clarke: The previous Government rejected any form of direction of traffic. They found, as everyone else found, that that was totally impracticable. The two modes of transport are often not in direct competition as some forms of traffic are more suitable for rail and other forms are more suitable for roads. The answer is to try to accommodate both methods using the resources available and making a sensible choice of priorities.

Mr. Dykes: Is the Minister aware that juggernauts are becoming an increasing menace everywhere? The particular problem on motorways is that juggernauts are going too fast in the centre lane for ordinary motorists. Is he aware that they often give the private motorist a difficult time, and, if the private motorist will not yield, they move into the fast lane which causes difficulties on overcrowded motorways? Will the Minister look carefully at the problem and give advice to the hauliers and their drivers?

Mr. Clarke: I agree that juggernauts are not popular. It is obviously necessary to carry on designing our roads to take traffic out of residential areas, where it is a particular nuisance. I agree that there is bad behaviour on motorways but sometimes private motorists hog the middle lane and stop the faster-moving heavy goods vehicle drivers making the progress that they would wish along the central lane. We give guidance in "Driving" about proper behaviour on motorways. We hope that motorway driving standards in all types of vehicles will improve.

Mr. Stoddart: Is the hon. Gentleman aware that he could be accused of complacency following his answer to the original question? Does he not realise that the spray from heavy lorries is most dangerous? I am quite sure that it causes many accidents and creates much fear among motorists. Will the Minister please give this matter priority in his research?

Mr. Clarke: I said that we are undertaking research and have placed a new research contract in November last year with Southampton university. This is a


serious problem and we have not yet found the solution to reducing spray.

Motorway Service Areas

Mr. Lee: asked the Minister of Transport when he proposes to introduce the necessary legislation to dispose of motorway service areas.

Mr. Fowler: Legislation is not required. Arrangements for the disposal of motorway service areas in accordance with my policy statement of 22 October are well under way. I have appointed Messrs. Richard Ellis, one of the leading firms of chartered surveyors, to assist me with sales.

Mr. Lee: I thank my right hon. Friend for that answer. Will he tell us what his plans are for relaxing the rules governing advertising slogans bearing the names of operators in service areas? Has he any intention of using a starring system—or something similar—for facilities at motorway service areas?

Mr. Fowler: The answer to both questions is "Yes". The policy of the previous Government was that Government should solemnly undertake inspections by the Department four times a year in an attempt to check standards at motorway service areas. We have rejected that and have given new freedom to operators in order to ensure greater competition. We plan to introduce a star rating system which, we hope, will be assessed by the motoring organisations. We believe that, by allowing the service area operators to advertise their own names, it will make a contribution to improving the services.

Mr. Foulkes: In all seriousness, will the Minister explain how these proposals will improve the appalling standard of service—alongside high prices for food—at the private enterprise motorway service facilities? Does he realise that their standards make a British Rail pork pie look like a gourmet item?

Mr. Fowler: That would be an unusual attribute. We have had 20 years of control of motorway service areas, with Government Departments solemnly sending out inspectors to look at the standard of fish and chips in motorway cafes. That did not improve results. We believe that competition will effect an

improvement and that is why we have introduced it.

Transport Supplementary Grant

Mr. Booth: asked the Minister of Transport which metropolitan authority has had the largest cut in transport supplementary grant between 1979–80 and 1980–81; and what percentage this represents of its 1979–80 grant.

Mr. Fowler: Tyne and Wear county council was allocated 46 per cent. less transport supplementary grant for 1980–81 than for the current year.

Mr. Booth: How can the Minister expect a metropolitan authority to carry out its statutory duty to develop and maintain good passenger transport services—at a time when the costs of those services are rising—if he chops 46 per cent. off the grant? Surely that is a totally unreasonable proposition? The right hon. Gentleman should find the funds to enable the metropolitan authorities to carry out the duties laid upon them by this House.

Mr. Fowler: The Tyne and Wear authority is a special case, because of the leasing of rolling stock and the use of extra loan sanction outside the TSG system. The fact is that Tyne and Wear still does comparatively well.

Mr. Bagier: Is the Minister aware that the Tyne and Wear metropolitan authority has just increased its rates by 30 per cent? Did the cut in the transport grant have an effect upon that increase?

Mr. Fowler: Without examining the arrangements it is difficult to comment. The Tyne and Wear authority is treated fairly compared with other authorities.

Mr. Robert C. Brown: Is the Minister aware that the scandalous cut of 46 per cent. in the Tyne and Wear transport grant has resulted not only in a savage increase in rates but, more importantly, in a savage reduction in bus services? Is he aware that that is having a serious detrimental effect on an area which is already under-privileged?

Mr. Fowler: It is unrealistic to talk in those terms. I have already explained the reason for the reduction to the right hon. Member for Barrow-in-Furness (Mr. Booth). I cannot believe that, under any


objective analysis, it can be said that the Tyne and Wear authority is being badly treated in the provision of transport facilities.

Oral Answers to Questions — CIVIL SERVICE

Pensions

Mr. Meacher: asked the Minister for the Civil Service how many retired civil servants and other public servants received, at the last increase in their public pension, a rise of more than £50 a week.

The Minister of State, Civil Service Department (Mr. Paul Channon): Figures for the public services as a whole are not available centrally. As to the Civil Service in particular, the number is 18, out of a total of 348,000 pensioners.

Mr. Meacher: Is this not yet another example of one law for the poor and another for the rich under the present Government? Is the Minister aware that the Government are refusing to increase unemployment benefit in line with inflation—an insurance benefit paid for by contributions—and that that act will push millions into poverty? Is he aware that at the same time they are paying out huge, fully inflation-proofed increases to former top civil servants who receive pensions of over £15,000 a year? Does the Minister not agree that a limit must be imposed upon the rich before the poor are made to suffer more?

Mr. Channon: Whatever the merits or demerits of inflation-proofing it is ridiculous to launch a campaign against 18 people. The hon. Member is basing a campaign on about .005 per cent. of the 348,000 people involved.

Mr. Bruce-Gardyne: What progress has my hon. Friend made in the search for a new and improved mechanism to check on the computations of the Government Actuary in arriving at the real value of index-linked pensions in the public service?

Mr. Channon: The Government are continuing to study this matter with urgency. I hope that we shall be able to come to conclusions and make announcements before long.

Mr. Arthur Lewis: How many of the 18 former public servants have highly paid jobs such as bank managers and

directors because of their Civil Service experience? How many of them are in the other place receiving £16.50 expenses which is worth another £100 a day if one takes tax into account?

Mr. Channon: I cannot answer questions about individuals. The hon. Member has been kind to me in the past, but I have to say that that is a typical question for him.

Mr. Budgen: Has my hon. Friend any plans for obliging those who are in receipt of index-linked pensions to pay substantially more in the course of earning those pensions?

Mr. Channon: The Government are looking into the whole question of inflation-proofed public service pensions. The issues are extremely difficult. We hope to be able to ensure a stystem which is acceptable to the public servants and the taxpayers.

Mr. Wrigglesworth: Is the Minister aware that his answer to the hon. Member for Knutsford (Mr. Bruce-Gardyne) will be deeply disappointing to many retired public servants and to the Civil Service staff side because for about a month he has been unclear about how the investigation is to be carried out, and, indeed, why it is to be carried out? Did he not say a few months ago that he had the utmost confidence in the Government Actuary's figures? Why is the investigation necessary and who will carry it out?

Mr. Channon: It is interesting that the hon. Member should be so against an investigation into public service index-linked pensions when there is such disquiet about the issue. I have the greatest confidence in the Government Actuary but the question of index-linked pensions goes far wider than the Civil Service. It goes through the whole of the public services. That is why the question is not relevant to the issues at stake.

Staff Side (Meetings)

Mr. Straw: asked the Minister for the Civil Service when he expects next to meet representatives of the staff side.

Mr. John Evans: asked the Minister for the Civil Service when last he met representatives of the Civil Service trade unions and if he will make a statement.

Mr. Channon: I am meeting them constantly and will be meeting them again next week.

Mr. Straw: Do the Government intend to settle this year's Civil Service pay claim within the framework of the national pay agreement?

Mr. Channon: The normal processing of pay evidence is proceeding. No decision has been taken. The reports were received only in the last week or so. It is far too early to announce a decision.

Computer Maintenance

Mr. Butcher: asked the Minister for the Civil Service what savings in Civil Service expenditure he has identified from changes in computer maintenance.

Mr. Channon: Arrangements have been made with International Computers Limited to maintain certain computers in use beyond the life originally planned for them. An estimated saving of some £40 million up to 1985 is expected from this life extension programme.

Mr. Butcher: May I congratulate my hon. Friend on making such savings in his Department? Does he agree that there is further scope for the use of computers in Government Departments generally, in view of the ever-increasing complexity of Government business and the reductions in the cost of computer hardware?

Mr. Channon: I entirely agree with my hon. Friend. I shall pursue this matter as vigorously as possible. I am grateful for his question.

Redundancies (Scotland)

Mr. McQuarrie: asked the Minister for the Civil Service how many persons at present employed in Scotland in offices which are under his control will be made redundant under the proposed public expenditure cuts for the current year; and if he will identify these by region and by numbers involved.

Mr. Channon: Before redundancy is declared, the agreed procedures provide for a number of measures to be considered, including the redeployment of surplus staff to other Departments. Until all this has been completed, it will not be possible to say whether there will be any

redundancies in the Civil Service as a result of public expenditure reductions. We intend to keep redundancy to a minimum. It is most unlikely that there will be any in the current financial year.

Mr. McQuarrie: I thank my hon. Friend for that reply. Is he aware that it will be welcomed in Scotland where unemployment is 8·9 per cent? When he comes to consider redundancies, will he take that unemployment rate into consideration?

Mr. Channon: I shall certainly take anything that my hon. Friend says into consideration. I take his views seriously, especially those about dispersal. I have no reason to believe that the chance of Civil Service redundancies in Scotland is worse than elsewhere.

Mr. Penhaligon: Does the Minister expect to see any further transfer of Civil Service jobs from Southend to Scotland?

Mr. Channon: That is an interesting thought. I shall have to consult Mr. Edward Taylor about that.

Mr. Robert Hughes: Since the Minister is still saying that he is in favour of public service dispersal to Scotland, will he be supporting his former colleague, Teddy Taylor, in his by-election campaign in Southend, East?

Mr. Channon: With vigorous enthusiasm. I am looking forward to a convincing victory.

Staff Side (Meetings)

Mr. Wrigglesworth: asked the Minister for the Civil Service when he expects next to meet the national staff side of the Whitley Council.

Mr. Channon: I refer the hon. Member to the answer that I gave today to the hon. Member for Blackburn (Mr. Straw).

Mr. Wrigglesworth: In view of the speculation about further cuts in public expenditure and Civil Service manpower, will the Minister explain, the next time he meets the national staff side of the Whitley Council, when further cuts are to be made and when a definitive announcement will be made to clear up the anxiety in the minds of civil servants?

Mr. Channon: If there were a further announcement about cuts I would naturally tell the national staff side at the earliest opportunity. I refer the hon. Member to my statement of 6 December. There has been no significant change since then.

Mr. Bruce-Gardyne: Can my hon. Friend assure the House that work is still proceeding with all possible urgency on the options of 10, 15 and 20 per cent. economies?

Mr. Channon: My hon. Friend knows that those figures were not targets. In my statement on 6 December I said that a number of studies were being conducted in the Departments, notably in the Ministry of Defence, the Department of Health and Social Security and the Department of the Environment on further savings, which, I hope, will be in addition to what I believe to be the largest programme of savings announced at any one time.

Departmental Expenditure

Mr. Squire: asked the Minister for the Civil Service what progress he is making in cutting expenditure in his Department.

Mr. Channon: Expenditure by the Civil Service Department in the current financial year—1979–80—will be contained within the revised cash limits announced by my right hon. Friend the Chief Secretary to the Treasury on 26 June 1979, which took account of a 3 per cent. reduction in the pay component. A further reduction of £2·3 million—10½ per cent.—is planned by the end of the fiancial year 1983–84.

Mr. Squire: I thank my hon. Friend for that answer. Will he accept that one of the more effective ways of reducing Civil Service expenditure is to reduce the duplication of jobs carried out by central and local government? Will my hon. Friend encourage his right hon. and hon. Friends to extend the removal of controls along the line suggested by my right hon. Friend the Secretary of State for the Environment?

Mr. Channon: I most certainly agree with my hon. Friend's remarks I am grateful to him for drawing my attention to the matter. It is an issue about which I shall continually press my colleagues.

RHODESIA

Mr. Shore (by private notice): asked the Lord Privy Seal if he will make a statement on recent acts of terrorism in Rhodesia, and the arrangements for securing free and fair elections in that country.

The Lord Privy Seal (Sir Ian Gilmour): The situation has not changed substantially since my statement of 13 February. Elections on the white votes' roll took place on 14 February.
The Governor is continuing his consultations with party leaders with the aim of stemming political intimidation, which is making it extremely difficult for the majority of parties to campaign in certain areas.
Although there has been a disturbing number of violent incidents, the total number of casualties since ceasefire day is less than frequently occurred in a single week previously. Investigations are being pursued into a number of incidents, including the bombings in Salisbury on the night of 14 February.
Five hundred and forty volunteers from the police will travel to Salisbury this weekend to reinforce supervision of polling stations. We are grateful for the splendid response from the volunteers, and are sure that their presence will make a material contribution to the prevention of intimidation at the polls.

Mr. Shore: While thanking the Lord Privy Seal for his statement and noting with satisfaction the continued reduction in the acts of violence, I would not be doing my duty if I did not express, as one incident follows another, my growing anxiety at the course of events and the urgent need to reinforce confidence both inside and outside Rhodesia in our capacity to insist on effective and evenhanded administration in the closing phases of the election campaign.
What is now the total number of ceasefire breaches reported to the Ceasefire Commission, how many are attributed to Mr. Mugabe's followers, and how many to other parties? Have the Patriotic Front representatives on the Ceasefire Commission either volunteered, or been asked, to deal with their own dissident groups, as laid down in the Lancaster House


agreement? What information has the Lord Privy Seal about the clandestine bombing of the Salisbury churches by members of the Selous Scouts? Surely, that unit, above all others, should have been confined to barracks and closely monitored.
Is it not clear that the Governor is much hampered by lack of independent information when making his decisions? How else would the Minister explain the conflict of evidence between the claim of Government House that the Mount Darwin area is one of the worst areas of intimidation and the public statement today, of the British election supervisor, that that is not true?
What action does the Lord Privy Seal propose to take to compel the withdrawal of the unlawful presence of the Rhodesian security forces from within the perimeter of the guerrilla assembly area Bravo, following the strictures upon the security forces made by the Australian captain in charge of the Commonwealth monitoring force?
As it is clear that threats to the ceasefire and the election process come from many sources, I strongly urge the Government not to take any measures that would incite the already strong suspicions of partiality, to make better use of the Commonwealth observer forces, especially at the polling stations when the votes are cast, and to consider whether the parties to the Lancaster House conference should not now be collectively reconvened to attempt to allay the widespread suspicion that exists and to discuss the handling of the difficult and dangerous post-election position that lies ahead.

Sir I. Gilmour: The right hon. Member for Stepney and Poplar (Mr. Shore) spoke of the need for even-handed administration. I wish that he had been a little more even-handed in the past. His persistent tendency to find fault with the Governor's administration, to give no praise where it is due, and to make the position seem even worse than it is, does him and his party no credit.
The right hon. Member asked about the number of ceasefire incidents. Thirteen are attributed to the security forces and the auxiliaries; 22 to ZIPRA; 11 to the old ZIPRA area of operations; 93 to ZANLA; 35 to the old ZANLA area of

operations; and 17 to bandits with PF weapons. Fifteen are unattributable.
The right hon. Gentleman asked about the incidents on 14 February, and he attributed them to the Selous Scouts. Those serious incidents are being investigated. It is far too early to attribute blame, just as it is far too early to attribute blame for the appalling murder of the Roman Catholic missionary near Fort Victoria today.
The right hon. Gentleman said also that the Governor lacked independent advice, and drew attention to the remarks of the British observer about Mount Darwin. In saying that, he contradicted himself. The British observer is one only of the many sources of British advice open to the Governor. It is largely on British advice that he has been acting. There are many election observers and the election supervisor who are giving the Governor advice. I regret the general tendency of the right hon. Gentleman's remarks.

Mr. David Steel: I wish to ask the Lord Privy Seal about the progress of investigations into two specific incidents. One incident concerned two members of the security forces, who were found blown up in their car. They were thought to have been in disguise. The second incident concerned the land mine under Mr. Mugabe's car.
On the general scale of violence and intimidation, whether carried out by the Patriotic Front or the auxiliaries, is the Lord Privy Seal—despite the additional police for the polling stations—satisfied that the monitoring force does not yet require further reinforcement?
What is happening about the charges against Mr. Garfield Todd?

Sir I. Gilmour: The right hon. Member for Roxburgh, Selkirk and Peebles (Mr. Steel) will be aware that I have already commented on the events of 14 February. Those serious incidents are being investigated.
As to the deplorable attack on Mr. Mugabe, a remote control explosive charge was detonated on the road to Fort Victoria airport. Mr. Mugabe and his party were returning from an election meeting. We understand that following the explosion the attackers opened fire on the damaged vehicle, but fortunately Mr. Mugabe was unhurt. Some of his


officials were either shot or slightly injured. Urgent police investigations are in hand.
The right hon. Gentleman is misunderstanding the function of the monitoring force. They are there to monitor. They are not there to prevent intimidation. That is something that they cannot do. It is worth saying, in passing, that they monitor the auxiliaries.
I told the House last week about the charges against Mr. Garfield Todd. We do not have full details yet, but they concern aiding and abetting terrorism. Last week Mr. Todd saw the Rhodesian Attorney-General, who, in the light of Mr. Todd's statement, is considering whether the prosecution should proceed.

Mr. Amery: Is there any truth in press reports that there are between 4,000 and 5,000 Mugabe guerrillas, at least, still in the bush and that there are about the same number of Mr. Nkomo's force held in reserve on the other bank of the Zambesi? Does that not represent some threat of intimidation to the holding of free and fair elections?

Sir I. Gilmour: In the nature of things, it is impossible to estimate accurately the number of Patriotic Front guerrillas who have not assembled, but the figures given by my right hon. Friend in relation to ZANLA are unlikely to be wide of the mark. As he knows, there is considerable contrast between what has gone on in the east of the country and what has gone on in the west. The same kind of thing has not taken place in the west. The ZIPRA forces have concentrated and there have been relatively few incidents in the west of the country.
The presence of a large number of guerrillas who have not assembled in the eastern part of the country has produced considerable intimidation. The House should realise that every party other than ZANU P F has complained about the intimidation. Both Mr. Nkomo and Bishop Muzorewa have been unable to hold meetings in certain areas. Of course, that represents discrimination of a very serious kind.

Mr. Whitehead: Does the right hon. Gentleman agree that it is because we deplore acts of intimidation from any quarter that we are particularly concerned about apparent acts of clandestine sabo-

tage carried out by security forces under the control of the Government? Is this not a case for the formal restraint of the Selous Scouts until the elections are over?
Secondly, will the right hon. Gentleman join the House in deploring a reported statement by the South African Government this afternoon threatening military intervention if things do not go in a way that they approve in Rhodesia?

Sir I. Gilmour: I have not seen the statement to which the hon. Gentleman referred, so I cannot comment. I deplore all acts of intimidation. I wish that the Opposition were equally even-handed. I have already referred twice to the deplorable events on 14 February, but it is too early yet to attribute blame, just as it is too early to attribute blame for other equally deplorable incidents.

Several Hon. Members: rose—

Mr. Speaker: Order. I must warn the House that for the debate on the Scottish economy I am already aware that many more right hon. and hon. Members want to speak than will be called. Furthermore, this is an extension of Question Time. I propose to take two more questions from either side of the House.

Mr. Maxwell-Hyslop: What arrangements have been or will be made to ensure that any of the British police seconded to Rhodesia who are injured or killed there will be entitled to compensation no less generous than they would receive from the Criminal Injuries Compensation Fund if they suffered death or injury in Britain?

Sir I Gilmour: That is an extremely important question. We hope that the contingency will not arise. However, I shall draw my hon. Friend's remarks to the attention of my right hon. Friend the Home Secretary.

Mr. Buchan: The Minister asked for an even-handed attitude from the Opposition. Is he aware that the anxiety, both internationally and here, is due to the lack of even-handed attitude that we have been getting from him and from Lord Soames? Has he forgotten the Lancaster House agreement, under which both sides were to be used? How does he square that with the running free of the previous


rebel forces—the Selous Scouts, the auxiliaries and the security forces, on which he bases his entire case?

Sir I. Gilmour: With respect to the hon. Gentleman, I was at Lancaster House. I am not unaware of the terms of the agreement, and they have not been broken. The Lancaster House agreement stated that if all the Patriotic Front forces assembled the Governor would have no need to deploy the security forces from their bases. Unfortunately, that has not happened. Therefore, there has been a need to deploy some of the forces. It is as simple as that.

Mr. Gummer: Does my right hon. Friend agree that an even-handed attitude would be helped if, in public statements by the Opposition, the fact that there are still large numbers of guerrilla forces who have not yet reported was deplored? Is it not a pity that today a long question was asked without that statement being clearly made?

Sir I. Gilmour: I agree with my hon. Friend. It is fundamental to what has been happening in Rhodesia over the past few weeks that several thousand guerrillas have not assembled and have been exercising considerable intimidation. That is not disputed by anybody, except possibly in this House. Everybody in Rhodesia, including Mr. Nkomo, agrees about it. I hope that the House will finally take it on board.

Mr. Hooley: If the situation in the eastern part of Rhodesia is as uncertain as the Lord Privy Seal described it today, is there not an overwhelming argument for strengthening the monitoring forces so that the eventual outcome of the election will be acceptable to the international community?

Sir I. Gilmour: The hon. Gentleman is misunderstanding the function of the monitoring forces. They are there, first, to see that the security forces behave in a proper manner and, secondly, to see that the Patriotic Front forces behave in a proper manner in their assembly camps. They are not there to prevent intimidation. In the nature of things, they cannot conceivably do that.

Mr. Shore: I make it absolutely plain that we deplore all breaches of the cease-

fire, including those made by substantial numbers of Mr. Mugabe's guerrillas. There should be no question about that at all. I also make it absolutely plain that we have great confidence in all the efforts made by our own people in Salisbury. But the right hon. Gentleman should not get so over-sensitive and touchy about very proper questions about the behaviour of a Rhodesian civil, police and military organisation that has defied this country for 15 years.
I should like to ask one final question. Will the right hon. Gentleman tell the House whether any serious discussions have begun or are due to take place about the dangerous and difficult post-election situation that will arise with so many armed men owing so many different allegiances in different parts of Rhodesia?

Sir I. Gilmour: There have been discussions on what the right hon. Gentleman rightly calls a difficult and sensitive problem. I should be deceiving the House if I said that a complete solution had been found. There is not one. But there has been considerable consultation, and we must hope that things turn out not too badly.
I repeat, the right hon. Gentleman makes an error in maintaining that the Governor is relying on the advice of Rhodesians. There are many British people there on whose advice he is relying.
To end on a less controversial note, I hope that the right hon. Gentleman will have an enjoyable, successful and educational tour of the area.

Mr. Faulds: On a point of order, Mr. Speaker. I hesitate to cross swords with you, Sir. You know my warm regard for you, but—

Mr. Speaker: Order. I know the hon. Gentleman. Nobody crosses swords with Mr. Speaker. An hon. Member may submit a point of order, and I presume that that is what he is proposing to do. If he wishes to cross swords, he had better come and have a cup of tea, and we shall do it privately.

Mr. Faulds: I withdraw my weapon, Sir.

Mr. Cryer: That makes a change.

Mr. Faulds: I simply pose a question of appropriateness. Is it right that we should be denied an opportunity of pursuing questions on Southern Rhodesia—which is in a very volatile and dangerous state and for which the House is entirely responsible—simply because we are moving to a debate on the Scottish economy, which is not likely to improve much in the next five years under the present Government?

Mr. Speaker: Order. I remind the hon. Gentleman that there are statements with questions to follow. There is then to be an application under Standing Order No. 9. I want to be as fair to the Scots as to everyone else.

EUROPEAN COMMUNITY (AGRICULTURE MINISTERS' MEETING)

The Minister of Agriculture, Fisheries and Food (Mr. Peter Walker): With permission, Mr. Speaker, I should like to make a statement about the Council of Agriculture Ministers which took place in Brussels on 18 February. My hon. Friend the Minister of State and I represented the United Kingdom at that meeting.
The Council had a preliminary discussion of the Commission's price proposals for 1980–81, together with the package of economy measures which the Commission presented to the Council in November. Several member States argued that the proposed price increases were far too modest, and they pressed for much higher increases. I emphasised that as we are by far the largest net contributor to the Community budget we had a special concern to see the cost of the CAP brought under control. I pointed out that the Commission's proposals would produce only a relatively small overall saving on the estimated budgetary cost of the CAP and that that was acheived only by the raising of substantial additional revenues through the proposed levies on milk. I said that firm price restraint was necessary, particularly for those commodities in structural surplus, including milk, sugar and wine.
On the main problem commodity, milk, I argued that the Commission's proposals were intended to prevent further surplus, and that they would do nothing to tackle the level of the existing surplus.
I said that the Council needed a plan to achieve a steady reduction in surpluses. I opposed the exemptions from the co-responsibility levy which would discriminate against the United Kingdom, as well as the Netherlands and Denmark, who supported my stance. The details of the milk proposals are now to be studied further by a group of senior officials.
The Council had a further discussion on sugar, but it did not reach agreement. I supported the Commission's proposal to cut maximum quotas by 1.3 million tonnes. However, I made it plain that even the Commission's revised quota


proposal for the United Kingdom discriminated strongly against the United Kingdom, in that it would still involve a 24 per cent. cut in our present maximum quota, compared with a cut of only 5 per cent. in other member States, and in France and Germany. Other countries objected to the quota allocations, and any decision was deferred until the next meeting of the Council on 3–4 March.
Again we opposed any extension of the existing temporary scheme for high priced end of season distillation of wine, stored under the long-term contracts.
In a further discussion of sheepmeat there was wide recognition in the Council of the serious consequences for the Community which resulted from a failure of one member country to obey the law. There was some discussion of possible interim arrangements to apply until a definitive sheepmeat regulation could be agreed. I made clear once again that the obligation on the French Government to respect the Court ruling was quite distinct from the question of Community arrangements for this sector.
I asked for and received from Vice-President Gundelach an assurance that whatever further discussions might take place on interim arrangements the Commission would play fully its role as guardian of the Treaty. I also said that I would not accept any arrangements under which one set of member countries gave financial aid to another member country to enable it to obey the law. Nor would I accept any endorsement by the Community of intervention in the sheep-meat sector.

Mr. Mason: I am sure that the House is grateful to the right hon. Gentleman for that report. Is he aware that last year he told the council that the Commission had the wholehearted support of the British Government for a general freeze on prices? He failed in that, because thereafter food prices were increased. This year the right hon. Gentleman stated again that he wanted a price freeze but only for those products that are in structural surplus. That will include milk and sugar. We are pleased to note that the right hon. Gentleman is resisting the Commission's present proposals. I hope that he can assure the House that he will not give way again.

This time he must be as tough as the French have been against him on the question of lamb.
Is the Minister prepared to accept increases in beef and cereals, because there is no mention of them in his statement? Does he intend to argue for retention of the butter subsidy which he obtained last year? What are his views on retention of the beef premium? Further, is he aware that the British consumer and taxpayer now want a total freeze on prices, an end to subsidised food mountains, and a promise from the Government that the CAP will be reshaped to give us a better deal?
Finally, even if the Commission's proposals—as distinct from the farmers' demands—for a 2½ per cent. average increase on prices are accepted, it will cost the British consumer £150 million. Price restraint is important, and we hope that the right hon. Gentleman will fight for it.

Mr. Walker: I find the right hon. Gentleman's questions quite extraordinary. He was a member of a Cabinet which in all discussions on price fixing agreed to price increases for every commodity. His Cabinet agreed further price increases on every commodity that was in surplus, including milk and sugar. He was a member of a Government under whom the cost of the Community budget rose from £l½ billion to £7 billion. I do not want lectures from the right hon. Gentleman on how to conduct price negotiations, particularly as the last price negotiation was the only one at which Britain gained a net advantage.
We have made it clear that we are in favour of a price freeze on milk and sugar. The Commission has put forward a proposal for a beef cow subsidy limited to the first 15 cows in any herd, which would discriminate considerably against the British beef herd. We have said that we are willing to consider such a beef cow subsidy, provided that it applies to all beef cows and not to a limited number so that British industry would benefit.
On the beef premium, the position is such that we must wait to see whether there is a satisfactory interevention system, and a satisfactory beef cow subsidy system which would retain the confidence of British beef producers. Unless that happens, we consider that it is


essential to continue with the beef premium system.
We are opposed to the eradication of the butter subsidy for the United Kingdom while the Community continues to give export subsidies to the Soviet Union.

Mr. Peter Mills: Will my right hon. Friend bear in mind that the retention of the butter subsidy is extremely important for the consumer? It is also a matter of clawing back some of the finances that we have paid in to the Community. Will he also bear in mind that it is a matter of principal? It is better and certainly fairer to ensure that consumers within the Community are subsidised rather than the Communist world.

Mr. Walker: The British Government have stated firmly that we are against providing subsidised foods for the Soviet Union. We have constantly pursued that view. Under the previous Labour Government a great deal of subsidised butter was exported to the Soviet Union. In the price fixing discussions last year that were denounced by the right hon. Member for Barnsley (Mr. Mason) we obtained the best butter subsidy ever obtained for the British consumer. That was one small way of remedying the injustice of the British contribution to the CAP. I pointed out to the Council of Ministers at the meeting on 18 February that as the biggest contributor to the budget, in spite of our benefit under the butter subsidy, we expected the best possible restraint in CAP expenditure.

Mr. Geraint Howells: I welcome the Minister's statement, and I agree entirely with the stand that he is taking in Europe. I believe that he should stand firm in support of the dairy and sheep producers in Britain, which he has done. When does he believe that we will be able to reform the CAP? What plans has he to help our beef producers?

Mr. Walker: Obviously I, too, would like to see speedy reform of the CAP. It is obviously operating against the interests of Britain. I believe that it is also operating against the interests of Europe as a whole, because of its domination of the entire European scene. Other matters of importance could be undertaken by Europe if the CAP was not such a dominant issue. However, the speed with which the reform is

achieved is not in my control; it is in the control of nine member countries, of which Britain is only one. I can assure the hon. Gentleman that we will do everything in our power to hasten that reform.
Regarding the beef producers of Britain, I was shocked that the Commission, which had mentioned to me, in discussions prior to its price fixing proposals, the potential of a beef cow subsidy in the current state of the market, put forward a proposal that limited the number of cows to the first 15 in any herd. Britain produces 27 per cent. of the beef herd in Europe, and therefore such a subsidy should be of net benefit to Britain. However, because of the manner in which it has been framed, Britain would be a net loser. I am unwilling to accept that proposal.

Mr. Hardy: Does the Minister agree that the Council meeting did not make sufficient progress in preparing for the necessary adaptations that are required for the widening of Europe? Does he agree that the adaptation has to begin and that the maintenance of the present level of surpluses is quite unhelpful?

Mr. Walker: As I made clear in my statement, it could be argued that the Commission is proposing for the first time to limit future surpluses in the milk sector. However, when those surpluses are of the present gigantic proportions, I agree that that is not sufficient action. We require proposals that will reduce—not immediately because of the economic and social effects that will have—over a tolerable period the massive existing surpluses that are costing the taxpayers of Europe so much.

Mr. Kimball: Is my right hon. Friend aware that fat lamb this spring is fetching less per kilo than store lamb fetched last autumn? That is a serious situation. Does he agree that if the French could be made to comply with the European Court ruling we would have no need to set aside taxpayers' money for intervention in either the sheepmeat or the beef market.

Mr. Walker: We are the biggest producers and consumers of sheep in Europe and, as such, under the Treaty, we should have enjoyed the rights of freedom of marketing throughout the Community. Eight of the nine member countries agree


with that theme and the Commission also agree with it. That is why I hope that the undertaking that I quoted in my statement from the Commission will be carried through and that the Commission will seek an interim injunction against the French for their continuing illegal practices.

Mr. Spearing: Will the Minister confirm that the continuing stance on the prices that he has mentioned today is in no way linked to fisheries policy? Will he tell the House whether it is linked to any other policy, in particular to the arrangements for the import of New Zealand butter and lamb?

Mr. Walker: As far as we are concerned, it is totally unlinked. I cannot guarantee and I will not prophesy that other countries in their arguments for price fixing will not use—as they have always used in every price fixing argument—the position of New Zealand. If Europe pursued a policy that destroyed an economy such as New Zealand, that would do immense damage to the Western world and, in the longer term, to Europe as a whole.

Mr. Nicholas Winterton: I welcome my right hon. Friend's statement, which, I am sure, will be welcomed by the farming industry, but will he give a firmer commitment not to make any concessions on milk which would be disadvantageous to the dairy farmer in this country? Will he also indicate what discussions he has had with his European colleagues about the use of some of the European funds for the promotion of liquid milk and milk products?

Mr. Walker: Last year, the Commission made proposals which exempted from the co-responsibility levy a whole range of farmers and which operated distinctly against the British dairy farmer. As my hon. Friend knows, we refused to accept that and I made clear that that was totally unacceptable to us.
I repeated at this Council meeting that, having gone through the experiences of last year—when Britain stated categorically that she would accept no levy which discriminated against the British dairy farmer—I was surprised that the Commission came forward with new proposals this year that repeated the same

error. I made perfectly clear that in way would we repeat our performance of last year. I categorically stated that if there is to be a co-responsibility levy it will be one that does not discriminate against the British dairy farmer.

Several Hon. Members: rose—

Mr. Speaker: Order. I propose to call those hon. Members who have been rising, but I shall be grateful if questions are kept brief.

Mr. Dykes: Is my right hon. Friend aware that the whole House will support him in pressing for price freezes on some products and restraint on other products? Will he assure the House that he will have the full support of the NFU and the European Parliament in this regard, bearing in mind reports of a change of attitude in the latter body?

Mr. Walker: It is not for me to guarantee constant support from either the European Parliament or the NFU. Therefore, I cannot commit those bodies to the approach that they will make on those matters. However, it is not in the interests of British agriculture or British taxpayers to pay enormous sums of money to finance surpluses that British farmers do not produce.

Mr. Dalyell: Ethyl alcohol? What was the rather laconic reference to the end-of-season distillation of wine in the statement? BP Chemicals, Grangemouth, has to make a major investment decision of over £50 million. What advice should be given in these circumstances?

Mr. Walker: As far as the discussion of the alcohol regime is concerned, I hoped that that matter would be on the agenda. It was at the last Council meeting before the price fixing and it was hoped that such items would be on the agenda. In fact, it was not on the agenda. Only the wine package was on the agenda, in which there is the factor of the distillation of surplus wine into alcohol, which we oppose. Until the price fixing is out of the way, I doubt whether the alcohol package will come on to the agenda. We have made perfectly clear to the Commission the position of the synthetic alcohol industry in this country and our requirement that the potential of that industry should not be handicapped and undermined. To some extent, while the existing situation, which is favourable


to our synthetic alcohol industry, continues and until such time as the matter comes on the agenda—

Mr. Dalyell: What about the investment decision?

Mr. Walker: I recognise that. Alas, the agenda is not in my control. There is no doubt that during March, April, May and June price fixing will dominate the agenda. I registered our views on the topic to the Commission at the last Council meeting.

Mr. Speaker: Order. I do not wish to be unfair to the hon. Member for Huntingdonshire (Mr. Major). He was on the point of getting to his feet when I said that I would call only those hon. Members who had been rising. I shall call the hon. Gentleman later.

Mr. Marlow: Is my right hon. Friend aware that, although we are encouraged by what he has said, many people will feel that the Council has been concerning itself with detail? The people of this country are fed up with paying vast amounts of money for the surpluses in richer countries in Europe. Is my right hon. Friend aware that, unless and until radical and far-reaching changes are brought about in the CAP whereby countries pay for their own surpluses, there is a risk that the majority in this country, including a large number of Conservative Members, will wish to take up the French suggestion that we should become an associate member of the Community.

Mr. Walker: There are many political, trading and economic factors which make it important for Britain to remain part of the European Community. At the recent one-day meeting, for the first time in the history of the Community, the Commission made proposals on the milk surplus which mean in reality the imposition of a national quota. Through the extra levy, that will also mean national financing of that extra surplus. As one Opposition Member has already pointed out, that is unsatisfactory from this country's point of view because, while it might deal with extra surpluses, it does not deal with the massive existing surpluses which we are financing. I hope to draw that fact to the attention of my colleagues on the Council of Ministers.

Mr. Stoddart: Is the right hon. Gentleman aware that he will have the support not only of the House but of the whole country in resisting further increases on all products, not only those in structural surplus? Will he point out to his counterparts in Europe that the British consumer is paying £70 per head more for his food as a result of our membership of the Common Market? The British consumer is getting fed up with that and will not stand for it for much longer.

Mr. Walker: Putting the matter into perspective, I hope that the House will recognise that the burden of finance is primarily involved with the financing of the disposal of surplus products. For example, this year's budget is about £7 billion. The total of all price increases, including items in surplus and items not in surplus, is £200 million. Therefore, it is not the dominating factor. The dominating factor in the CAP is the disposal, at massive expense, of surpluses that Europe does not require. We must concentrate on that area.

Mr. Major: I am grateful, Mr. Speaker, for your traditional tolerance.
Will my right hon. Friend enlarge on the Commission's proposals for sugar? Is it not a fact that the revised proposals call for a 10 per cent. reduction in our A quota and a 75 per cent. reduction in our B quota? The comparative figures for France are 2·6 per cent. and 11·6 per cent. respectively. As France is in structural surplus—unlike Britain—is not that proposal entirely unsatisfactory? Will my right hon. Friend assure the House that the Government will treat the proposal accordingly?

Mr. Walker: It is a totally unsatisfactory proposal. It is also unsatisfactory that we have to make a considerable contribution towards financing the disposal of those surpluses, despite the fact that we make no contribution to them. I am willing for Britain to accept a cut in its quotas. That would not mean a cut in our production as that has never reached its quota position. The figures for last year show that British agriculture is totally capable of reaching its quota position. It would save us money if there were a cut in the quota for this year, and I am advocating that. However, I do not accept that countries such


as France which produce an enormous surplus of sugar should have a cut in their overall quotas of 5 per cent. while Britain which produces no surplus of sugar has a cut of 25 per cent.

Mr. Leighton: In the plainest terms, will the Minister reassure the House that he will maintain his resolute objection and, if necessary, will veto any price increases right across the board? I think that that was the answer that he recently gave to his hon. Friend the Member for Holland with Boston (Mr. Body).

Mr. Walker: I have never maintained the view that all prices—including commodities that are not in surplus—should suffer no increase. There is no logic in that. There are plenty of areas in which the Community can produce more food and become more self-sufficient. That would be of great interest to British agriculture. The price increases proposed are of pretty modest proportions. In a budget of £7,000 million they amount to £200 million in total. The greater part of that £200 million goes on items in surplus. It is perfectly reasonable to say that we shall oppose price increases for those items in surplus, such as milk, sugar and wine. However, I am not willing to state that we should categorically oppose any price increase in other commodities.

Dr. David Clark: Will the Minister protect the interests of the British consumer by resisting any reduction in the butter subsidy with the vigour that the French applied to protecting their interests in sheepmeat?

Mr. Walker: I shall not do it illegally as the French have done. However, on the estimates for 1980 Britain will be in net deficit on the common agricultural budget to the sum of about £1,200 million. The next worse-off country is Germany, which is in net deficit to the sum of about £400 million. All the other countries are beneficiaries. The fact that Britain receives a unique advantage as regards the butter subsidy that I achieved is not just of benefit to Britain; it benefits butter producers in several other Community countries. For example, at the last Council meeting Denmark and several other countries supported the retention of the British subsidy. In the current circumstances, it

is perfectly reasonable to continue with that advantage. As the hon. Gentleman has said, it benefits British consumers.

Mr. Spriggs: Is the Minister aware that Britain pays a major part of the contribution to the Community budget? Why does he support the export of butter to foreign countries? Surplus butter could be supplied to the British housewife.

Mr. Walker: The hon. Gentleman's remarks are contrary to everything that I have said this afternoon. At every Council meeting of Foreign Ministers and Agriculture Ministers this Government have been totally opposed to subsidies on foodstuffs—whether on butter or anything else—that are sold to the Soviet Union. That remains the position. Last year this Government negotiated the biggest butter subsidy that the British consumer has ever enjoyed.

Mr. Strang: Will the Minister reconsider his attitude to the variable beef premium? Surely he must accept that a beef cow subsidy and a modification of the intervention arrangements are no substitute for the benefits of the variable premium. Not only does that premium guarantee prices to our farmers; it reduces intervention. As a result, beef is more readily available to consumers at lower prices. In view of the announcement to the effect that there will be no special summit to deal with our budgetary problem, will he bear in mind that agriculture accounts for 80 per cent. of the total budget. As the agricultural price package must be unanimous, that is the one area in which the Minister can exercise leverage over the other member States.

Mr. Walker: I only wish that the hon. Gentleman had exercised that leverage when he was a Minister. Throughout the period of office of the previous Labour Government, the CAP went up and up, as did our contribution to the Community. The Labour Party never used any leverage. Every year the Labour Government agreed to price increases on butter, sugar and milk. All of those products were in surplus. However, I am glad that the hon. Gentleman has had a conversion.
The beef premium scheme was introduced because a Labour Minister of Agriculture, Fisheries and Food decided


not to operate the intervention system for an important and crucial period. That tremendously undermined the beef market in Britain. The scheme came in on that basis. Since then the cost of administering it has been far greater than the payments that have been made to farmers. I would not eradicate that system unless I had a better system and one that improved the beef premium system. At the moment I do not have an improvement on that system. I am therefore against the Commission advocating its abolition. If I had an alternative that cost less in administration and that gave more benefit to beef producers, I should be glad of it.

OVERSEAS AID

The Minister for Overseas Development (Mr. Neil Marten): With permission, Mr. Speaker, I should like to make a statement on overseas aid. Soon after assuming office, the Government instituted a review of the policies governing the overseas aid programme. This review is now complete. Our ability to support development overseas is dependent on the state of our economy and the need to strengthen it. Nevertheless, the Government will continue to provide aid to the developing countries on a substantial scale. Official aid continues to be an essential element in development, especially for the poorest countries. Within the limits of our resources we must seek to relieve poverty in the developing world so as to create conditions for greater peace and stability and to contribute to the growth of world trade on which Britain so critically depends.
Trade is of the greatest importance for the developing countries. If the free world were to slide down towards protectionism we would all suffer, but the consequences for the developing countries would be particularly serious. We provide a substantial market for their products and will encourage others to do the same.
Private investment can and should play a greater part in development, and we hope that the relaxation of exchange controls will further encourage British firms to invest overseas. We believe that it is right at the present time to give greater weight in the allocation of our aid to political, industrial and commercial considerations alongside our basic developmental objectives.
We need to maintain the strength of our ties with the Commonwealth, to which the greater part of our bilateral aid now goes, and to fulfil our obligations to our remaining dependencies. We must also be able, when necessary, to offer help and encouragement to other friendly countries. The greater part of our bilateral aid is tied to procurement in the United Kingdom and so provides valuable orders for British firms. Our contributions to multilateral institutions also enable British firms to compete for very substantial business, financed by


them all over the world. We are examining means by which they might get a greater share of this business.
Since 1978 about 5 per cent. of the bilateral aid programme has been made available from the aid-trade provision for sound developmental projects—which are also of commercial and industrial importance for British firms—in developing countries to which we do not normally provide aid, or where the planned allocation is already committed. In order to maintain the value of this provision in real terms, its share of the bilateral aid programme will now be increased.
The unallocated margin in the aid programme will be increased, so that we can respond more effectively to new developments where our political or commercial interests are involved.
Our commitments to international agencies and bodies will absorb a larger proportion of the aid programme over the next few years. As we need more room for manoeuvre in bilateral aid, we shall need to look critically at our expenditure on multilateral aid programmes.
Improved inter-departmental arrangements will ensure that all these considerations are brought together.
The administration of the aid programme is being examined in a thoroughgoing management review of the Overseas Development Administration to ensure that the programme continues to be managed effectively and economically.
Much can be done with our aid programme, which is to the mutual advantage of the developing countries and ourselves, and we shall therefore concentrate on using it in that way.

Dame Judith Hart: Will the hon. Gentleman accept that the statement basically endorses the aid strategy of the Labour Government, which comes rather oddly after a discussion on wine surpluses in the EEC? Our strategy has been nibbled at the edges, but substantially remains. Does the hon. Gentleman accept that the proposals in the statement appear to have been influenced at a critical stage by the publication of the Brandt report?
I hope that I shall not embarrass the Lord Privy Seal—who is not in the Chamber—the Foreign Secretary or the hon. Gentlemen, but will they accept my con-

gratulations on their powers of persuasion and influence on their free-market, monetarist and anti-aid colleagues at a crucial point?
My first question concerns the substantial scale mentioned. What scale? We provided for a 6 per cent. increase, in real terms. At present, there is a 5 per cent. cut, in real terms. What will happen next year?
The aid and trade provision was opposed by a number of Conservative Members when I introduced it. By how much is it to be increased? Most importantly, will the developmental criteria under which it was established be fully maintained?
What proportion of the aid programme is to be unallocated?
I recognise that essentially the bilateral programme is cut in a reduced programme of aid and with multilateral commitments that cannot be evaded. The hon. Gentleman today endorsed the strategy of aid to the poorest countries. How far will the proposals nibble at the fringes of that aid? I noted the provision of £15 million to Turkey, which can scarcely be called aid to the poorest. That aid came out of the reduced aid budget.
Are the Government continuing the emphasis on rural development and income creation among the rural poor, who constitute 78 per cent. of the population of the developing world and upon whom the whole theme of interdependence is based?
We have already asked for a debate on the Brandt report. Although not strictly a question for the hon. Gentleman, could we discuss the issues raised in the statement in a general debate on where we are going in our relationships with developing countries?

Mr. Marten: I am grateful to the right hon. Lady for her congratulations, although I am not sure who is being congratulated. I shall pass them on when I read Hansard tomorrow.
The timing of debates is for my right hon. Friend the Leader of the House. No doubt he will also read Hansard tomorrow.
The right hon. Lady suggested that we were endorsing the previous Government's


policies. She must know that due to the previous Government's commitments, which we are honouring, there is little room for manoeuvre to change policies. Any change must be gradual. I believe that that answers her point.
The right hon. Lady referred to financial matters concerning the aid-trade provision, the increase in the aid programme and contingencies. The aid framework is not finalised, and perhaps she will await the publication of the White Paper.
We are pressing on with a great deal of rural development for the benefit of the poorest people.

Mr. Onslow: Will my hon. Friend accept that his statement will be more widely welcomed when the country sees that he is not merely turning down the hosepipe of aid employed by his predecessor but directing scarce resources in genuinely advantageous ways, in our interests as well as those of the recipients? Does he agree that the more that that is seen to be our objective, and the less indiscriminate multilateral aid that we are involved in, the more likely there is to be genuine public support? Will my hon. Friend confirm that he did not need the assistance of the Brandt commission to make up his mind?

Mr. Marten: The review was produced before the Brandt report was published. My hon. Friend states absolutely correctly that political, industrial and commercial considerations will now play a more prominent part in our considerations.

Mr. Higgins: My hon. Friend said that some of our aid is to be at the service of British foreign policy. Does he therefore accept that if such aid is used to sustain corrupt and dictatorial regimes against the will of the people it will harm our overseas reputation?

Mr. Marten: I hope that we do not use aid to sustain corrupt regimes. We shall bear such factors in mind in our consideration of the political and developmental content of aid.

Mr. Alton: When drawing up the statement, what consideration was given to the Brandt report and programme for survival? When does the hon. Gentleman anticipate that we shall reach the

target of 0·7 per cent. of our gross national product for overseas aid to which successive Governments have pledged themselves?
Will the hon. Gentleman snake a statement on full-cost fees for overseas students? Does he agree that that is one way in which many poor countries are discriminated against, because they will have to reduce their quota of students sent to this country? Will he consider the abolition of fees for students from poorer countries?

Mr. Marten: On the hon. Gentleman's last question, the answer is clearly "No". I shall not consider the abolition of fees for overseas students.

Mr. Alton: For those from poorer countries.

Mr. Marten: As I said earlier, the review is complete and it is on that review that I am reporting. The review was produced before the Brandt commission published its report.
In the past year we achieved 0·48 per cent. of the United Nations' target.

Mr. Brocklebank-Fowler: Do the Government propose to look seriously at the Brandt report? If so, in what time scale? Secondly, when will my hon. Friend's Department finish the management review and publish its proposals? Thirdly, what steps does my hon. Friend propose to ensure that British industry benefits to a greater extent from contracts awarded internationally under the European Development Fund?

Mr. Marten: We are taking steps to see whether British industry can get more contracts under the EDF. The British Overseas Trade Board is looking into the matter urgently. The management review should be complete in about July. I believe that it will be an internal review, and it is unlikely to be published.

Mr. Guy Barnett: I welcome the attention that the hon. Gentleman is paying to the rural aspect of aid, but did he see the recent letter in The Times from Mr. Ewart Parkinson, drawing attention to the problems of urban poverty in developing countries? Will he accept—it is relevant to the political considerations that he may have in mind—that urban poverty can often be damaging to a


regime that is attempting to deal with economic problems generally?

Mr. Marten: I am afraid that I did not read the letter in The Times. It is one of many that escaped me. I shall look it up and read it. I take the hon. Gentleman's point about urban poverty. It is reflected in the fact that some Governments keep down the price of food for reasons of urban poverty, which results in a lack of food production in developing countries.

Mr. Kershaw: Will my hon. Friend look favourably on the operations of the Commonwealth Development Corporation, which provides a very cost-effective way of giving aid to the mutual benefit of both sides?

Mr. Marten: Yes, we will certainly do that. Indeed, I am afraid that another review is taking place of the Commonwealth Development Corporation.

Mr. McNamara: Will the right hon. Gentleman accept that not everyone accepts what my right hon. Friend has said, namely, that this is merely a nibble at his programme, but that it is a magnificent bite at it, because it has in so many ways changed the whole policy and bearing of the programme? Will the right hon. Gentleman tell the House which of the multilateral aid programmes are to be reduced and indicate where the surpluses are to come for the unallocated margin and for the increase in the 5 per cent. bilateral aid programme? Does he also realise that his statement is nonsense until we know the amount of money to be made available and the financial constraints within which he is working?

Mr. Marten: Yes, we will be looking at all European Community and United Nations multilateral agencies.
On the question of the timing of this statement, I am very sorry that the hon. Member finds it nonsense, but I thought it right to make the statement. We can perhaps discuss the financial implications when the White Paper is published.

Mr. Speaker: Order. I propose to allow another five minutes for questions on this before we move on. I hope that the questions and answers will be brief.

Mr. John Townend: Will my right hon. Friend accept that, with the con-

tinuing need to reduce public expenditure, the majority of the British public would give high priority to a reduction in overseas aid especially to those countries that consistently oppose Britain's foreign policy?

Mr. Marten: Many differing views are, of course, held about aid and its purpose, and whether it should be greater or smaller. If we have a debate on the Brandt report, no doubt that matter will be extensively discussed.

Mr. Newens: Will the hon. Gentleman recognise that any cuts in aid, whether multilateral or bilateral, will hit not only developing countries but British exporters? Is he aware of the extent to which British exporters are already at a disadvantage compared to their competitors in the less advanced countries? What will he do to ensure that the situation does not worsen?

Mr. Marten: We hope to help British exports through the aid-trade provision and, of course, 70 per cent. of the bilateral aid is tied. Furthermore, the British Overseas Trade Board is taking steps to see whether we can get more business out of the multilateral agencies. There are great opportunities there for business men, if they will seize them.

Mr. Body: What is the Minister doing to press his partners in the Common Market to be less selfish and protectionist to those Third world countries that have not the advantage of being in the ACP block, because if the level were reduced at least some part of this aid would not be as urgently needed as it is now?

Mr. Marten: I am grateful for my hon. Friend's observation. When I attend the next meeting of the Council of Ministers I shall bear that point in mind.

Mr. Greville Janner: As the Minister has indicated that he regards overseas aid not only as a measure of compassion but as one of enlightened self-interest, will he not repudiate the comments of his own side about turning off the hosepipe of aid, which, after all, is aid to people who are in desperate poverty? Will he also please state that this reference to the political implications does not mean that countries like India are to have their aid cut off?

Mr. Marten: Of course, countries such as India and Pakistan will not have their aid cut off. We still hope for a substantial aid programme to those countries. However, on the whole, Parliament is a reflection of what the public think, and I am sure that many people think just that. It is perfectly fair to reflect this view.

Mr. Aitken: Since my hon. Friend told us that he completed the review before the Brandt report was published, and since it is fair to say that his review has met with some disappointment in almost every section of opinion in the House today, may I ask him when he expects the Government to produce a constructive set of proposals and a review of the Brandt commission's very important new ideas?

Mr. Marten: As the right hon. Member for Lanark (Dame Judith Hart) said in her letter to The Times today, we need time for reflection—"a pause for reflection" was the expression that she used. I think that the Government are quite right not to make a quick response. We need to study very deeply this most important document.

Mr. Spearing: Will the Minister agree that his statement today has meant a change in the criteria of British aid policy? Could he say when and how he will announce the change in multilateral commitment that he mentioned in his statement?

Mr. Marten: Yes, the hon. Gentleman has got it right exactly in the expression that he used. We shall proceed to have talks on multilateral aid to see where we can make economies and also benefit more from it. That will happen over the months ahead.

Dame Judith Hart: What is disappointing about what the Minister has said today—may I ask him, perhaps, to remedy it?—is that he seems to pay no account at all to the analysis of global issues that affect the global economy and also our own economy and society in the cast-off remarks that he made about the Brandt report. I am sure that he does not really mean that. May I give him the opportunity to correct the impression that he has conveyed?

Mr. Marten: I have made no "cast-off remarks," whatever they are. I merely think that it is sensible for Governments and political parties to take their time in considering the full implications of the Brandt report. It is absurd just to throw off a comment, as it were. It is, of course, very important. I have referred at least twice to its importance. We are going to study it in great depth before we commit ourselves to comment on it.

STEEL INDUSTRY (PICKETING)

Mr. John Stokes (Halesowen and Stour-bridge): I beg to ask leave to move the Adjournment of the House, under Standing Order No. 9, for the purpose of discussing a specific and important matter that should have urgent consideration, namely, the claim by picket leaders
that 2,000 steel workers and miners will descend on the Sheerness Steel Company on the Isle of Sheppey, that coachloads of steel workers and miners are travelling from Yorkshire, Scotland, the Midlands and South Wales to the steel plant, together with 300 miners from Kent, and that as a result, a serious breach of the peace will occur, in addition to possible damage to property, and inconvenience and danger to local people.
I submit that this is a specific matter because the threat has actually been made and is now in process of being carried out. It is a very important matter, as you yourself stated on Monday when I made my earlier submission, which should concern this House. I have grave doubts that even some 500 London police will be sufficient to prevent violence and disorder throughout today and I fear that some workers will be prevented from entering the factory or from carrying out their duties, or will be harassed when they try to leave.
Since I wrote to you before 12 o'clock today, Mr. Speaker, in spite of some serious incidents at Sheerness involving very large numbers of pickets—including at one time a charge of some 1,000 pickets against the police and some 19 arrests—I understand from a more recent report that the situation is quieter but still menacing. Meanwhile disorder has broken out in Lanarkshire, in Scotland, where, up to 2 pm, which is the last time I received information, about 11 pickets have had to be detained by the


police. I have no doubt that other disturbances are being planned in different parts of the United Kingdom and will continue to be until suppressed.
Finally, I submit that the matter is urgent for the reasons that I gave in my earlier submission on Monday—namely, that these massive demonstrations and disorders cannot be allowed to continue if Parliament is to be responsible for "peace and tranquillity" in the realm, as we prayed earlier this afternoon.

Mr. Speaker: The hon. Member for Halesowne and Stourbridge (Mr. Stokes) gave me notice before noon today that he would seek leave to move the Adjournment of the House for the purpose of discussing a specific and important matter that he believes should have urgent consideration, namely,
 That 2,000 steel workers and miners will descend on the Sheerness Steel Company on the Isle of Sheppey, that coach loads of steel workers and miners are travelling from Yorkshire, Scotland, the Midlands and South Wales to the steel plant together with 300 miners from Kent, and that, as a result, a serious breach of the peace will occur, in addition to possible damage to property, and inconvenience, and danger to local people.
As the House will understand, I have given a great deal of thought to the hon. Gentleman's submission. As I indicated on Monday, I view the matter with deep concern, as does the rest of the House. There are many factors that I have to take into account. As the House knows, in the language that is normally used in the House, I have to take into account the several factors set out in the Order, but to give no reasons for my decision.
After anxious thought I am of the opinion that this is not the time to grant this application and, therefore, I cannot submit the hon. Gentleman's application to the House.

CONTROL OF INTERCEPTION

Mr. Bob Cryer: I beg to move:
That leave be given to bring in a Bill to further control electronic interceptions, eavesdropping, and telephone interceptions; and for connected purposes.
In 1765 in the Court of Common Pleas Mr. John Entick brought an action for trespass against a Minister called Carrington challenging a warrant issued by the Minister to seize John Entick's papers. Lord Camden, in finding for the citizen, said:
To search, seize and carry away all the papers of the subject on the first warrant: that such a right should have existed from the time whereof the memory of man runneth not to the contrary, and never yet have found a place in any book of law is incredible… If it is law, it will be found in our books. If it is not to be found there, it is not law.
The right of the Secretary of State for the Home Department to authorise the tapping or bugging of phones is not to be found in our books—certainly not in legislation authorised by Parliament. The nearest statute is the Post Office Act 1953. Section 58(1) of that Act permits interference with postal packets under the authority of the Secretary of State.
The first 15 pages of the Birkett report of 1957 were devoted to considering the sources of authority for tapping. Bugging was not then a matter of concern. The report sets out the procedure whereby the Home Secretary authorises each tap. Paragraph 56 states:
In our opinion each warrant should in future specify the name and address or telephone number of the person who is the subject of the warrant.
However, a report in the New Statesman of 1 February stated:
Only the police, we were told, stick to the procedure of obtaining a warrant before placing a tap; the secret agencies have 'carte blanche'. Their activities may be covered by a general warrant, which counts as 'one' in accounts given to Ministers even though hundreds of lines may be involved.
When I questioned the Home Secretary the right hon. Gentleman sought refuge in a blocking reply and thus prevented further questions for three months. Ex-Inspector Dick Lee, who headed the successful "Operation Julie" drugs investigation, is reported as deploring the risk


of abuse under present arrangements. He told the New Statesman:
It is an executive Decision—there's absolutely no accountability.
In the recent Malone case, Sir Robert Megarry, the judge in the case, said that interception is a matter which:
cries out for legislation".
My Bill provides an answer to that call.
Recent reports of tapping have included such wide-ranging items as the ISTC headquarters at Rotherham, where a special picket was arranged at which only the police turned up. There was phone tapping of the black participants at the Lancaster House conference. An editorial in the New Statesman of 15 February suggested that between 2,000 and 3,000 taps per year are authorised. Conservative Members have referred to bugging by the Customs and Excise that is apparently well outside the terms of cases involving:
a substantial and continuing fraud which would seriously damage the revenue or the economy of the country if it went unchecked.
That is a quotation from the Birkett report. Hence there is a cause for public concern.
It is against a not unsurprising background of declining public confidence in governmental institutions that democratic accountability to the House for the actions of the Government should be restored, especially on such an important issue as the interception of private telephone calls by the State. My Bill will put into legislative form some of the proposals made by the Birkett committee of 1957.
It is not part of my proposition that the police should be handicapped in their pursuit of serious crime. However, in view of continuing public concern, my Bill will require that an application for a Home Secretary's warrant to authorise interception of communications must be made on a sworn information or affidavit. That would apply Patrick Gordon Walker's view in his minority report of 1957.
Three conditions will be required for the granting of a warrant. First, the offence must be serious. It must be defined as a crime for which a man with no previous record could be expected to be sentenced to not less than three years'

imprisonment. If a group were involved, at least one person would have to be so regarded.
Secondly, the Home Secretary must be satisfied that normal methods of investigation have been tried and have failed.
Thirdly, there must be good ground for believing that an interception will result in conviction.
In Revenue cases the criteria in paragraph 66 of the Birkett report will apply. That means that warrants will be issued only where a case
involves a substantial and continuing fraud which would seriously damage the revenue or the economy of the country if it went unchecked.
The criteria for security service warrant applications will cover the same criteria as warrants for the police, but with the proviso that injury to the national interest will be an additional ground.
In his statutory annual report to Parliament, the Home Secretary will be required to define that additional ground to indicate the areas that he deems to be covered by the term. If hon. Members question that, I remind them that between 1909 and 1953 lotteries were felt to be against the national interest. Mail was intercepted over the years on that ground; hence, in my view, the need in broad terms for a statement on the issue.
The security services will be expected, like the police, to have regard to securing convictions in their applications for interception. No material obtained by warrant will be disclosed to private individuals, private bodies or domestic tribunals of any sort. That would put into law paragraph 101 of the Birkett report. A schedule to the Bill will set out the form of warrant to be used by the Home Secretary. The name, address and telephone number of the person concerned will be listed on the warrant and the period of the validity stated.
On completion of the inspection the warrant will be returned to the Home Secretary with information as to the use of the material obtained and, where any prosecution is undertaken, a statement that all tapes have been destroyed. A weekly review of warrants will be required of the police, security services and Customs and Excise and all unused warrants must be cancelled and returned forthwith to the Home Secretary.
The Bill will make illegal any unauthorised phone-tapping or electronic eavesdropping and will also give power to the Home Secretary to make regulations, by affirmative resolution of the House, for the control of surveillance by private organisations or individuals and the introduction of a licensing system for the security industry to ensure conformity with those regulations.
Lastly, there is the crucial element of accountability to this House. The Bill will require the Home Secretary to lay an annual report before Parliament. That report must state the number of warrants issued, though not the persons concerned. It surely is reasonable that Parliament should know the extent if not the nature of the tapping. In 1955 Birkett recorded a maximum figure of 241. If in 1982, for example, 5,241 were recorded I think that it would be reasonable that Parliament should know why.
Since the likelihood of conviction is an important justification for the issue of a warrant, it will be necessary to publish the number of convictions gained as a guide to the effectiveness of interception. The policy of national interest as defined by the Home Secretary will also be included so that any changes can be recorded and possibly debated.
This Bill will not require details of actual interceptions to be published, but

it will give elected representatives information about the extent of policies governing interception. My hope is that it will help to restore confidence to an area of activity which is provoking great concern, and that Parliament will once again become the guardian of democracy and accountability. At a time when the Post Office is about to change from its present electro-mechanical system to system X, which is an electronic system which will be extremely easy to tap, it behoves Parliament to ensure accountability in what is very shortly to become a completely electronic age.

Question put and agreed to.

Bill ordered to be brought in by Mr. Bob Cryer, Mr. Ernie Ross, Mr. Stuart Holland, Mr. Andrew F. Bennett, Mr. Jim Marshall, Mr. Frank Allaun, Mr. Tony Benn, Mr. Neil Carmichael, Mr. Norman Atkinson, Mr. Russell Kerr, Mr. Christopher Price and Mr. Dennis Canavan.

CONTROL OF INTERCEPTION

Mr. Bob Cryer accordingly presented a Bill to further control electronic interceptions, eavesdropping, and telephone interceptions; and for connected purposes: And the same was read the First time; and ordered to be read a Second time upon Friday 29 February and to be printed. [Bill 149].

SCOTTISH ECONOMY

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Wakeham.]

The Secretary of State for Scotland (Mr. George Younger): I am very glad that a day has been found by the Government upon which we can debate the state of the Scottish economy. To a certain extent it is a bit of a departure that this is so, because during the previous Government's term of office no Government day on the Floor of the House was devoted to a discussion of the Scottish economy. The only two days that we did have, I think, were asked for by the right hon. Member for Western Isles (Mr. Stewart), although an Adjournment debate was requested by Mr. Jim Sillars. All the other debates were in Opposition time in the Estimates debates upstairs. I suppose that one should be sympathetic towards the previous Government. They were perhaps anxious to have as little as possible said about their deplorable economic record. Nevertheless, I am glad that we have time today.
We have started this debate rather late and there are many who wish to speak. Therefore, it will not be possible for me to cover every aspect of the Scottish economy in the time available to me. I will try to cover those aspects that I hope will be of most interest to hon. Members, but if there are points upon which I do not touch and to which hon. Members would like answers, I am sure that my hon. Friend the Under-Secretary will hope to catch the eye of the Chair and will answer as many questions as he can.
There is no doubt whatever that the economies of the Western world are going through a very difficult time. The general state of world trade and lack of world economic recovery is the most important and serious factor against which any kind of policy for economic expansion in this country must operate. Therefore, we must now look at how the Scottish economy is faring against what is a very difficult economic background generally.
I should first point out that there are huge variations in how things are going within Scotland. Some parts of Scotland are doing very well, particularly where

North Sea oil is a major factor, whereas other parts—such as our older heavy industrial areas in West Central Scotland and Dundee—have very serious problems which are deep-seated and not easy to solve. One of our top priorities must be to concentrate help in these areas to ease the human problems and to build a new industrial base for those areas.
We all know that since the war there has been continuous loss of employment in traditional manufacturing industry. The fact that Scotland has a large concentration of that type of industry has made our difficulties greater and caused our unemployment rates, at various times, to he as much as double the national figure. Since 1970 we, like the rest of the United Kingdom, have suffered from a considerable loss of competitiveness vis-a-vis our overseas competitors and an increasing penetration of imports into our own markets.
Manufacturing output in the United Kingdom is now no higher than it was in 1974, and since 1975 exports of finished manufactured goods have risen by less than 12 per cent. against an increase of 65 per cent. in imports of such goods. Over the five years from 1973 to 1978 our average growth rate in the United Kingdom fell below 1 per cent. a year—less than half that achieved by France or West Germany.
While North Sea oil contributed significantly to an improvement in Scotland's relative economic position in the early 1970s, from about 1976 Scotland has done significantly less well than the United Kingdom as a whole. Unemployment in Scotland has risen in comparison with unemployment in the United Kingdom as a whole. The total industrial output has risen at a slower rate in Scotland than elsewhere—just over 1 per cent. Between 1975 and 1978 compared with 4 per cent. in the United Kingdom—and there is a similar pattern for manufacturing output alone.
Against those worrying figures there is one surprising feature that we sometimes overlook, which is that even in these difficult times there has been a continuous growth of employment. The total number of people in employment in 1979 was about 35,000 greater than in 1970; that was brought about by the loss of 128,000 jobs in the manufacturing, primary and construction sectors and was more than


balanced by a gain of 161,000 jobs in the tertiary sector. But in net terms these new jobs were insufficient to provide employment for all the additional people who came on the labour market during that period. That is why the unemployment rates have risen, to the great concern of successive Governments. That is a matter that has not been referred to sufficiently often and it is a factor that we should bear in mind.
When we took office in May of last year we faced a difficult and deteriorating situation and an acute need to create a climate in which the rate of generation of new jobs could be enhanced. We inherited the aftermath of a rash of major industrial closures which had taken place under the previous Administration and we were faced with further closures which had become inevitable by the time the previous Government demitted office—for example, Goodyear, SKF, Pye, Monsanto and Prestcold. At the same time, companies were experiencing acute problems as a result of the rising level of wage settlements, the events of last winter, and a severe squeeze on their liquidity.
The future of the Scottish economy depends crucially on changing its balance by encouraging the productive and wealth-creating sectors and allocating a higher priority to them. It is their success and their profits which pay for all our public spending programmes. It is because these sectors have been declining under the previous Government's policies that we must now reduce our public spending. This readjustment is painful for us all. No one likes to offer reduced services to his constituents. But at least there is one great benefit that has come about as a result of the events of 1979 and the last general election. It is now common ground between the two main parties in the House that public spending simply could not continue at the rate planned by the previous Government. The right hon. Member for Heywood and Royton (Mr. Barnett) and the Shadow Chancellor himself are both on the record on this matter, and although they now oppose every cut in expenditure, as parliamentary life requires, they are nevertheless clearly committed to cutting their own spending plans, should they ever need to face such a situation again.
Of course it takes time to make changes. We have been trying to do the equivalent of stopping a runaway train. But industry in Scotland can now read the clear signal that the Government recognise that it must have the priority now. We do not intend to impose any bureaucratic Government planning agreements, new regulations or interference. We will set industry in Scotland free to get on with the job of satisfying the customers.
It often occurs to me that we have spent so much time over the past few years arguing between ourselves and trying to sort out our internal troubles that in many cases we have forgotten and ignored that key person, the most important VIP for the Scottish economy—the customer. I hope that both managment and unions will be brought together and will understand the wishes and the needs of the customer. If that could be done, a great many of our industrial problems would be solved and many of the new markets that we seek would be satisfied.

Mr. Norman Buchan: rose—

Mr. Younger: If the hon. Gentleman does not mind, I shall not give way. I am rather reluctant to give way today because many Members want to speak, and I know from experience that if one gives way it prolongs one's speech.
We have already made an important move in the right direction. Our first priority must be—and the last Government always said that it was their priority too—the reduction of the rate of inflation. The fiscal and monetary policies which are designed to this end are critical to everything that is important to Scottish industry. This is neither easy nor painless. We have never pretended or deluded ourselves that this could be done quickly with immediate results. For the time being it has meant that we have interest rates that are very much higher than we would wish. We are well aware of the impact that this has on individuals and industry, but the House should understand that, however painful that is, the alternative is worse. The alternative is to allow inflation to proceed unchecked with all the disastrous consequences that that would have on jobs, employment and future prospects.
The success of the strategy that I have described will be the major determinant of Scotland's economic performance, and it is based on letting industry get on with the job itself. But this is not to say that there is no scope for constructive Government involvement with industry. However, Government must not prop up or encourage the development of non-viable enterprises, because that does nothing to create lasting employment: In fact, it acts as a brake upon the kind of industrial change which we need if we are to overcome our current malaise, and it can severely damage the profitability of successful industry. In the present circumstances the Government have a genuine and valuable role to play in, for example, redressing the regional balance of the United Kingdom by seeking to attract viable projects into areas of greatest need and by providing, through their agencies, some of the facilities required by industry in such areas.
The first step that we took on coming into office was to consider how the policy instruments that were available to us could be made useful and effective, more cost-effective and more consistent with the overall aims of industrial policy. I should like to mention four of these in particular—regional policy, the Scottish Development Agency, the Highlands and Islands Development Board and the special employment measures.
We inherited a regional policy the most outstanding quality of which was its lack of discrimination. Almost half of the country was designated as assisted areas. Projects there were eligible for selective assistance from the taxpayer whether or not such support was necessary to secure their development. Such a policy, in a period when the quality of mobile investment available was shrinking, fell far short of being effective, and by placing extra and unnecessary burdens on the taxpayer, it penalised successful industry as well. It was clear to us that the hallmark of any successful and effective regional policy must be firmly to discriminate in favour of those areas where the need was greatest.

Mr. Robert Hughes: rose—

Mr. Younger: I think I will press on. I am sure that the hon. Member will

be able to intervene later. I do not wish to be unco-operative, but it will take far too long if I give way.

Mr. Hughes: rose—

Mr. Younger: I shall give way just this once.

Mr. Hughes: On 19 July last year, the Secretary of State announced that there would be a special survey of the way in which the oil industry was affecting the economy of North-East Scotland. When will he announce the result of the deputation that went to see his colleagues in the Department of Industry? That deputation asked that there should be no change of status in the North-East until the report from the special survey had been made. Did not the Secretary of State try to con us then, and will he come clean now?

Mr. Younger: I appreciate the hon. Member's great concern about this matter, but I still think that such interventions will delay my speech. The study which I commissioned is under way and we shall get the results as soon as possible. I assure the hon. Member that he will be informed of them as quickly as possible, because I know of his interest.
The point about regional policy is that its resources must be concentrated on the areas of greatest need, and assistance must go to operations which would not be developed otherwise and which offer the prospect of secure and productive employment.
Some people have suggested that the changes that we have made will inhibit development in Scotland as a whole. Those people have not looked at the facts. Scotland now has a greater proportionate share of the industrial population living within special development areas than before—37 per cent. now as against only 30 per cent. before—and in recognition of the very severe difficulties of West Central Scotland we have extended that special development area to include Kilmarnock, Troon, Ayr and Largs. The level of assistance in SDAs remains at its former level. It now has a stronger pulling effect for providing jobs in those areas than it had before. That is something that I hope everyone will welcome. I emphasise that regional policy


is not about stimulating industry generally. By its very nature it is about discrimination in favour of those areas where there is greatest need. That is why I suggest that the present balance of the new policy is better than the old.
I fully appreciate the concern of areas which are being downgraded, and I will be watching very carefully how this turns out. In that way any adverse effects can be taken into account in the revision that we have promised to all areas that are being downgraded by more than one step before the final step is taken in July 1982. Regional policy must be discriminating if it is to work. Those in the areas that are being downgraded have the complete assurance that a further review will take place before the final step is taken, and I hope that everyone will produce the necessary evidence and views so that we can make sure that the decisions taken are the right ones.
The second subject that I wish to discuss is the Scottish Development Agency. We have always acknowledged that the agency has a major role to play in the regeneration of Scotland's industrial infrastructure and the provision of facilities for industry, particularly in the form of industrial estates. But we were concerned at the extent of the agency's powers of investment in private industry, and at the distortion which these powers could cause, both in sectors where the agency was active, and in the overall priorities of the agency itself. The agency's previous guidelines encouraged it to see itself as an investment bank for Scotland with ancillary rehabilitation and factory-building powers. We see it, by contrast, as a mechanism for the provision of facilities for industry, with its investment powers ancillary to its other functions and its operations co-ordinated closely with the other private and public sector bodies which work in this field.
We were concerned also about the extent to which the previous Government had provided resources for the agency which the agency simply could not use, thereby pre-empting expenditure for which provision had to be made by the taxpayer from other worthwhile projects. In 1977–78, the agency underspent its budget by no less than 30 per cent. and in 1978–79, which, although I suppose it is not connected, was widely expected

to be an election year, underspent its budget by a staggering 41 per cent. We were determined to put the agency's finances on a more realistic footing and, despite the expenditure cuts that we have had to make, it will still have significantly more to spend in real terms in the present financial year than it has ever succeeded in spending before.
That is a declaration of our confidence in those who work for the agency and the job that it can do for the economy. We have revised the agency's industrial investment guidelines to require greater private participation in agency investment and we are discussing with the agency new guidelines for the provision of sites and premises that will also encourage private participation. I am confident that, with these new and better defined priorities, the agency will have a greater prospect of contributing effectively to economic growth.
Two tasks of the agency that I regard as particularly important are the coordination of inward investment promotion and the encouragement of small firms. I support the comments made recently by the agency's chairman that it is no good complaining of foreign investment lost to Ireland and elsewhere. We must sell aggressively the broad range of advantages that Scotland has to offer. It is to the small firms sector in particular that we must look for the high growth companies of the future. The agency continues to provide advice, counselling and facilities for small firms, and financial backing, whether by way of loans or equity purchase, continues to be available for worthwhile, viable projects.
Within Scotland, too, the Highland and Islands require special and expert attention. We made clear before coming to office that we would continue to support the work of the HIDB. We see the board's programme of assistance for small businesses and enterprises as an important component of a policy to strengthen this area of the private sector. Soon after taking office, we increased the board's grant for the present financial year by £2·5 million to £17·3 million to enable it to draw out to the full the potential for private investment in its area. Provision for the board must take account of all public expenditure objectives. As regards the HIDB and the SDA, it remains the fact that no viable


project has yet had to be turned down because of shortage of funds to back it. That is a satisfactory situation. I hope that it will continue.
The special employment measures of recent years are recognised as important and helpful, particularly for those young people who find themselves unable to get jobs. But we have had to make some changes. As the House knows, we have decided that the small firms employment subsidy, which is the least cost-effective way of producing additional jobs, should be discontinued and that the qualifying age for men under the job release scheme should revert to 64. But we have retained the most effective of the Manpower Services Commission's special employment measures and we are expanding the youth opportunities programme to provide additional work experience and training opportunities for the young unemployed.

Mr. Dick Douglas: When the Secretary of State for Employment discussed this issue in the House, he gave some global figures. Is a breakdown of these figures available for Scotland?

Mr. Younger: I note the hon. Gentleman's point. I shall try to get those figures for him. My hon. Friend may wish to cover the point. What is important is that the youth opportunities programme is being expanded under this Government.
In addition to the job release scheme that I have mentioned, there is the special temporary employment programme, the temporary short-time working compensation scheme, community industry, training in industry, the job introduction scheme and, of course, the youth opportunities programme that I have mentioned. Over 43,000 people in Scotland were participating in all these programmes in December 1979. I have no doubt that the programmes were a great help to them.
I have already referred to the situation that we faced on taking office regarding closures. My hon. Friend and I have taken the greatest trouble to do everything possible, in each example of a major closure, to find any way of continuing operations and protecting the firm or the jobs. We have had numerous consulta-

tions. Between us, we have had over 50 meetings and consultations about various closures. I accept that it is the first duty of the Scottish Office and the Government generally to do anything within their power to assist a firm in trouble to weather the storm and to achieve a viable future, if at all possible. That was our approach to the problems of all these major closures.
In some cases, we have had a measure of success. We were actively involved in discussions—these have been mentioned in the press in recent days—leading to proposals for a joint venture involving Wiggins Teape and Consolidated Bathhurst Inc of Canada at the Fort William pulp mill. I am hopeful, too, that an agreement will shortly be finalised for the takeover of the Marathon yard at Clydebank by a French company which offers bright hopes for a prosperous future. There are Firm expansion projects which will do much to strengthen our industrial capacity and secure employment.
More recently, Caberboard Limited of Cowie announced a major new project of £6 million to establish a new line in medium density fibre board—a particularly welcome example of expansion in our wood industry. There is also major expansion on the way in electronics, to which I will refer, and we know of others that are being actively considered. Efforts to encourage investments are thoroughly worthwhile and will continue. There is a steady stream of inquiries, and my officials have been visiting the United States, in particular, to negotiate offers of financial incentives

Mr. Donald Dewar: rose—

Mr. Younger: I must press on. I know that the hon. Gentleman's intervention will be brief if he says so, but there are other hon. Members who wish to speak.
In other cases that we inherited, less was possible. But we made considerable efforts to ease the effects of closure. In the case of Massey-Ferguson, we did everything possible in the early days to see what could be done, with the excellent co-operation of the work force, which has done a tremendous job for its factory and community. A new company has been established, Moorfield Manufacturing, with the assistance of Massey-


Ferguson itself. In the case of Singers, my hon. Friend and I had a number of meetings with those concerned. There has been a major initiative through the working party at Clydebank. There will be many issues to follow up in order to help the community.
I should like to turn now to areas of some opportunity in the Scottish economy and areas which can benefit fully from some of the economic policies I have described. I have been pleased recently by CBI surveys indicating that industry regards export prospects in Scotland as generally stronger than in the United Kingdom as a whole. While unemployment is high, the number of notified vacancies—very much an understatement of the true position—is also high. We are giving our attention to ways of reducing the mismatch that these figures reveal—for example, through encouragement of liaison between industry and education, through improvements in the training system and through encouraging flexibility in the Labour Party—I mean the labour market. There is not much flexibility there, is there? That would be a real event. [An HON. MEMBER: "That is coming".] If it is coming later, that is indeed good news. It would be the best news of all.
We have in train a review of the Employment and Training Act, and the Manpower Services Commission is looking at vacancies that are hard to fill to see what can be done to help. A study is also taking place into the supply of electronics engineers and the difficulty experienced in recruiting them.
I should now like to refer to oil, petrochemicals and microelectronics, and to say more about small firms. Some 60,000 to 70,000 jobs have been created in Scotland as a result of North Sea activity. Oil exploration on the United Kingdom continental shelf had dropped to alarmingly low levels when we took office. We have taken decisive action to increase the pace of activity, including the ending of "farming in" rights for BNOC and our proposals for a seventh round of licensing. These measures are stimulating increased exploration and assuring the continued flow of our oil and the maintenance of many jobs dependent on it.
With the announcement before Christ-was of the orders of the Magnus and

north-west Hutton fields—on which Highland Fabricators and McDermotts are to be congratulated—all five Scottish platform yards have work in hand. The nature of the industry makes peaks and troughs inevitable, but we are determined that the United Kingdom yards, and the United Kingdom industry generally, should continue to receive a full and fair opportunity to compete for work. I am confident that Scottish yards will respond to that.
In addition to the jobs created through the provision of capital equipment and a wide range of services to the oil industry, there is also the employment provided at the onshore facilities, such as those at Sullom Voe, Flotta and St. Fergus. There are also encouraging developments downstream. The Shell-Esso development at Moss Morran will provide employment for 3,500 at peak construction time and, in the long run, around 350 permanent jobs, with considerably more in prospect should further downstream developments follow.
The Government are determined that the nation should secure maximum benefit from North Sea resources, and one important strand in that is the potential for petrochemical development founding on the feedstocks which are available. Recognising this, we have already taken steps to restrict gas flaring, and last July my right hon. Friend the Secretary of State for Energy announced a study by Mobil and the British Gas Corporation into the prospects of a new gas-gathering line. This is not the moment to anticipate its possible outcome, but there is every chance that it will provide industry with valuable new opportunities. Scotland's geographical proximity to the oil and gas fields, together with the other advantages which we have to offer, places us in a strong position to benefit from such future expansion.
Companies that have established themselves in Scotland from abroad have done much to reinforce Scotland's claim to be a major centre of advanced technology and a supplier of advanced products throughout the world. There is a growing emphasis on microelectronics, the applications of which have a critical part to play in improving products, processes and systems throughout industry and which have the major potential for growth in the coming decade. The quest


for investment from foreign microelectronic firms should not overshadow the need to encourage the expansion of firms already here.
The expansion plans announced by many of the microelectronics companies in Scotland, such as National Semiconductors, Motorola and Hewlett-Packard, to name but three, express a solid note of confidence in Scotland as a place in which to establish and grow, and an increasing commitment to research, design and development here. The Government will continue to do everything posible to encourage such growth, and to spread the use of microelectronics applications throughout industry. One way in which we hope to stimulate that is through a new microelectronics applications centre, which is at present the subject of a study commissioned by the SDA. However, the Government can do only so much. The main responsibility must lie with the industry. I was particularly encouraged, therefore, by the establishment of the Northern United Kingdom Circuit Group, which should do much to bring manufacturers of printed circuits and their users closer together.
Small firms are critical to industrial recovery. Recent research has endorsed the view that they have a significant role to play in the job-creation process but that the rate of creation has been lower here than in many of our competitor countries, such as the United States, Western Europe and Japan. We have already done much to implement the programme that we announced in our manifesto by reducing the administrative and legislative burdens on small firms and increasing incentives for entrepeneurs. We have reviewed employment legislation, and the Employment Protection Act is being amended to lengthen the qualifying period for unfair dismissals and to reduce the period of notice for small redundancies. The original provisions were a major discouragement to firms to take on new staff and increase the number of jobs.
We published a consultative document in September on company accounting and disclosure, proposing a much reduced amount of financial and accounting information that small firms need disclose. We introduced fiscal measures in the Budget designed to enable businesses to reward hard work,

initiative and success. We are examining ways of increasing the availability of funds for small firms, following the Wilson committee report, and we are considering the scope for further fiscal measures that will offer the right sort of incentive and we are reviewing the capital taxation system as it impinges on small firms.
It is important to bear in mind that the Scottish economy depends not only on the big industrial centres, where many of the problems exist, but on rural areas. The rural economy is of great importance to large areas of Scotland.

Mr. Gregor MacKenzie: The Secretary of State has indicated that he is to stop the small firms employment subsidy, because it is not cost-effective, and that he is examining schemes that will assist small firms financially.
I have had representations, as, I am sure, have many of my hon. Friends, about financial assistance to small firms. Would it not have been better if the right hon. Gentleman had made an advance announcement about the financial help that he proposes to give? Will he make a further comment as quickly as possible about how he intends to give small firms a little cash, because that it is what they need most?

Mr. Younger: I appreciate what the right hon. Gentleman has said. We would have been more reluctant to withdraw the subsidy if we had not examined it and found that it did not do its job or give value for money. That is not a criticism of its introduction, but it was not a properly thought out scheme. It was not a bad idea to bring in the subsidy, but it does not meet the need for which it was intended. We are therefore looking at other methods to try to help small businesses. I accept that, as the right hon. Gentleman said, they need attention and assistance to enable them to expand.

Mr. Dewar: Will the right hon. Gentleman give way?

Mr. Younger: No. I must press on. The hon. Gentleman may think that I have something against him, but that is not so.
It is important for small firms in rural areas to get help, but it is also important that agriculture should be given assistance. Our proposals, and the assistance


that we have been able to give agriculture, have been a tremendous help at a difficult time. In the past nine months we have devalued the green pound on three occasions and the farming industry has near parity with its competitors in the EEC.
The industry can look forward with confidence in the knowledge that the Government recognise the importance of a healthy, viable and prosperous farming sector. Other aspects of Government policy, such as easing restrictions on bus licensing, will be of benefit to the rural areas.
Of course there are problems in the great industrial centres in both shipbuilding and steel. After the tragedy of the long Hunterston dispute, which was the most senseless and self-defeating dispute that I can remember, we have the tragedy of the steel strike, and the most modern steel industry in Western Europe has been lying idle for much of the past year. I hope that the management and the unions will get together to solve the dispute with the greatest possible speed.
We have a difficult situation to deal with in shipbuilding, but the Government have made a clear statement and made funds available for a restructuring of the industry. There are encouraging signs that in a difficult situation all those concerned are doing all that they can to get the industry back on to a footing that it can cope with and at the right level for the demand that is available for it to satisfy.
I must draw my remarks to a close. If there are other matters that hon. Members wish to raise I am sure that they will be answered later by my hon. Friend the Under-Secretary. We are considering the Scottish economy at a time of great difficulties throughout Western Europe. The policies of the previous Government were given the maximum chance, for five years, to succeed. They had the full life of a Parliament and every resource that they could command, but, in spite of all the great words, the previous Government's handling of the Scottish economy was disappointing and disastrous.
When I left the Scottish Office at the beginning of 1974, the seasonally adusted unemployment figure in Scotland was 85,000—3.9 per cent. When I returned

in May last year the unemployment rate was 165,900. It had doubled under the previous Government.

Mr. Dennis Canavan: We know what it is now.

Mr. Younger: The hon. Member is quite right. He is quoting a different figure but that figure is still lower than it was under the previous Government in January 1978. The hon. Gentleman should remember that.
In July 1979 there were no fewer than 24,737 school leavers on the unemployment register, against the highest total under the previous Conservative Government of 8,200. It is no exaggeration to say that by April 1979 everyone in industry was demoralised and overwhelmed by regulations and restrictions and so-called planning agreements, and the Government's only response was to pour in more and more public money which they could not afford and which almost broke the back of the Treasury.
During that time the Government ignored the advice from industry, chambers of commerce, the CBI, and from all the organs of economic commentary throughout the nation. The only objective of all this spending of public money was resistance to change.
The strategy now being adopted is to lift the burden of excessive public spending which has held back that productive industry upon which we all depend. Our policy is to encourage productive industry to expand and to do better in future. We propose to help every viable project with resources such as those of the SDA and to help those people affected by the rundown of old industries—the people who are least able to help themselves.
Our strategy is to concentrate regional policy on the areas which have the greatest need and which have the largest numbers of unemployed. Many Labour Members represent those areas, and I hope that they welcome our strategy. That strategy is to create real jobs wherever we can, not phoney jobs which are no good to anyone and which cost the public money we can ill afford.
If the hon. Gentlemen believe that that is merely what I want they should study the comments, articles and studies published throughout the media which deal


with economic matters. They will find that this is exactly what industry wants. It is what the commentators want and it is what the vast majority of economic advice suggests. That is the strategy on which the Government are embarked, and if only we could get greater public acceptance of the need for change the Scottish economy would be greatly helped.
The greatest vice that we have had to deal with in recent years—much further back than the last five years—is resistance to change. In a changing world, when our customers and their needs are changing and where worldwide competition is definitely changing to our disadvantage, we must face up to change in Scotland. We must welcome change by making it an ally and not an enemy. If we can do that in the Scottish economy we shall be able to build upon the vast amounts of money that have been spent to assist recovery from our old industrial past. We shall be able to create new jobs that are productive and which will be good and worthwhile jobs. That is the Government's policy and we intend to achieve its objectives.

Mr. Deputy Speaker (Mr. Bernard Weatherill): Before I call the next speaker, may I say that I realise that this is an important Scottish debate and that, though interjections enliven a debate, no fewer than 29 right hon. and hon. Gentlemen have indicated that they wish to speak. I therefore appeal for brief contributions.

Mr. Bruce Milan: I am glad that we are having this debate on the Scottish economy, and I am grateful to the Secretary of State for Scotland for providing the time for it.
That having been said, however, my congratulations to the right hon. Gentleman and, because there was not a single thing in his speech which gave any encouragement to the Scottish economy, to those at present unemployed or to those who are likely to become unemployed during the next few months.
The unemployment total is now above 200,000, and will inevitably increase. This debate takes place against the gloomiest economic background and the gloomiest prospect for Scotland that I ever remember since I came to the House. Everything done by the Government in the last nine

months has made matters worse, and there is no indication that the Secretary of State has even an inkling of the disastrous effects of the Government's policies on Scotland and the even more disastrous effects that they will have if they continue along the same lines.
The right hon. Gentleman said that we should look at the United Kingdom economy as a whole. I am perfectly happy to set this debate against the general background of the United Kingdom economy, because, inevitably, the Scottish economy to a considerable extent depends for its success on what is happening in the United Kingdom as a whole.
Let us, therefore, look at the way in which the Government have handled the United Kingdom economy during the last nine months. The new monetarist and market economy policies are the basis of the Government's activities. How have they worked? Inflation at 18.4 per cent. is exactly twice as great as it was a year ago. That is the first result of the Government's policy. A disastrous Budget brought an increase in VAT and the Government have caused rent and rate increases—not just in the Lothian region but in the Borders and everywhere else—as a result of the RSG settlement. The Government have given deliberate instructions to the gas and electricity industries to put up prices by figures that go well beyond the current rate of inflation. However, they will not be well beyond the rate of inflation that we are likely to encounter in a few months.
Interest rates are at a record level and yet the Secretary of State for Scotland expects industry to invest when we have a minimum lending rate of 17 per cent. We cannot get investment under those circumstances. The right hon. Gentleman mentioned the CB1 expectations on exports. If he looks at the CBI survey for Scotland published in January, he will find that in every branch of economic activity the CBI outlook for Scotland is the gloomiest that we have seen as far back as I can remember. I do not believe that we have ever had a gloomier survey from the CBI in Scotland. That gloom is the result of the interest rates I have mentioned and the high rate of inflation.
Unemployment in Scotland is now over 200,000 and it will increase. Last month the figures rose in a single month by no


less than 23,000 and the seasonally adjsted figures by nearly 6,000 in a single month.
The right hon. Gentleman inherited an unemployment situation that I freely admit—as I have always done—was far too serious. Nevertheless, in the final period of the last Labour Government we had, month by month, been edging the unemployment figures down and with that inheritance the figures during the first few months of this Government continued to decrease.
An inevitable swing has taken place because of Government policy. We saw the first impact of those policies in the January figures. The right hon. Gentleman is lucky that we have had this debate today, because when we see the unemployment figures for February—to be published in a week's time—I confidently predict that they will be considerably higher and more serious than even the January figures.
The number of unemployed school leavers has also risen, and all this takes place against a background of accelerating factory closures in Scotland. Closures have now become such a commonplace that they hardly make news any more. We now have the worst record of factory closures that I can remember.
In an answer given to my hon. Friend the Member for Dunbartonshire, East (Mr. Hogg) concerning the Strathclyde region only, we were told that in December there were 5,345 redundancies. If one looks at the monthly figures for 1979 one can see an accelerating trend since May as a result of the Government's policies. As well as the 5,345 jobs lost in December, 3,937 have already been notified in Strathclyde. That notification was given towards the end of 1979 and indicated that those jobs would be lost in 1980. The situation will become worse.
The Government could at least use the instruments available to them to try to mitigate the effects of the closures and disastrous unemployment figures. However, in the current year the £500 million planned by the Labour Government for the Manpower Services Commission has been cut by £140 million, to £360 million. The chairman of the Manpower Services Commission, in evidence to a Select Committee, said that the Government cuts had

reached such a level that the MSC would no longer be able to carry out its statutory obligations. Yet the Secretary of State pretends that he is in favour of mitigating the effects of unemployment in Scotland. The MSC's work is directed towards the development areas. A cut of £140 million in one year is bound to have substantial effects on Scotland's employment prospects.
One has only to think of the steel industry to understand the results of the Government's handling of the economy. The Government's policy is said to be one of non-intervention. In reality it is one of intervention in its crudest form, because of the financial guidelines that it imposes upon industry. The Secretary of State for Industry blames Sir Charles Villiers and Sir Charles blames the Secretary of State for Industry. Both men have culpably mishandled the dispute and have made it more difficult and bitter. It will have lasting effects on the steel industry, not least in Scotland. The new Employment Bill will embitter industrial relations even more.
The Government have failed in their incomes policy. According to figures published today, incomes increased by 19·6 per cent. in the past year. That is under a Government that believes in a free-for-all and a free market economy. The inflation rate is 18·4 per cent. We have debated cuts in local authority spending, cuts in education, and cuts in school meals, milk and transport. We have debated cuts in the housing programme and in the health services. The Under-Secretary of State assured us only the other day that we need not worry about the National Health Service because so long as we increased prescription charges it would be safeguarded. However, the number of hospital beds is being reduced and the children's hospital in Glasgow has to resort to raffles to raise money for essential services.
That is the background. The financial benefits from North Sea oil have been flowing in increasing quantities, and yet the Government's economic record is appalling. Let us not believe that we are in a temporary difficulty. Let us not believe that this is only the first step and that after the economy has gone down a little it will recover with a gigantic bound. That will not happen. All the


forecasts, from Government and independent sources, are that the economic situation will become worse. The forecast is that industrial production will fall in the current year. The question is whether it will fall by 2 per cent. or 3 per cent., or more. Every indication is that inflation will become worse and that it will not stop before it reaches 20 per cent.—and it may go much higher than that.
On Monday, The Times gave us the Government's forecast for unemployment. The forecast is that in a year the number of unemployed will be more than 2 million. The last Government estimate was that unemployment would reach 1·6 million. That was serious enough. The figures are based on detailed, region-by-region forecasts. That means that there must be a Government forecast of unemployment in Scotland for January next year. It would be interesting to hear that figure from the Under-Secretary of State. Of course, he will not give us that figure. If we receive any information about anything from him it will be a precedent.
We can, however, work out the figures. Unemployment in the United Kingdom will be 24 per cent. in a year's time. At present 200,000 people are unemployed in Scotland. In a year unemployment in Scotland will total 250,000. Scotland suffers disproportionately and that must, therefore, be a minimum figure. Unless steps are taken soon to reverse Government policy we may be sure that unemployment in Scotland will total between 250,000 and 300,000. If the Secretary of State wants to deny that I give him the opportunity now. He knows that he cannot deny that figure. He knows that that is the prospect for January next year. The right hon. Gentleman can intervene to confirm or deny what I say. That rate of unemployment is inevitable, because of Government policy.
The engineering industry forecasts a fall in demand of no less than 20 per cent. It is a key industry in Scotland. The construction industry is experiencing its worst period since 1951. The indications are that the construction industry is on a downward course, which will mean the loss of thousands of jobs in Scotland.
We are told that the Government are looking for more cuts in public expenditure. We shall be told shortly where those cuts are to fall. Housing is most

likely to be affected by the cuts, although the housing programme is at its lowest level for more than 20 years. Wherever the cuts take place they will lead to a loss of jobs in Scotland.
The present situation is a direct consequence of the Government's first Budget, which was based on the proposition that by their giving tax cuts to the rich the economy would take off and become prosperous. The irony is that the policy is so successful that we are told that there will be no more tax cuts in the next Budget. The Government have already shot their bolt. The tax cuts for the better off have, in real terms, benefitted only those with incomes of more than £15,000 a year. The tax cuts will not be repeated, but the penalties of increased VAT, increased inflation and public expenditure cuts, which have been borne by ordinary people in Scotland in the last nine months, will continue to be borne for a long time.
The other irony is that despite all their action, the Government have not the slightest idea what will happen to the PSBR in the current year. They do not know whether it will go up, down or sideways. They do not know whether it it good, bad or indifferent whether it goes up, down or sideways. In a nutshell, the Government's economic strategy has completely collapsed only nine months after they came to power.
We are told that there are divisions in the Cabinet and that there are some hawks and some doves. It would be interesting to know whether the Secretary of State is a hawk or a dove. To me he seems more like a lame duck. In this position we want Scotland protected and, indeed, expect Scotland to be protected.
In recent years every Government, even Tory Governments, have done as much as possible, in difficult economic circumstances, to maintain benefits and protect the most vulnerable areas of the country. That has not happened under this Government. Scotland is in a difficult economic position. The problems are serious. There will be a difficult period ahead. We expect some initiative from the Government for the protection of Scotland.
Let us consider the record. The Secretary of State always presents regional policy in an agreeable manner. When


listening to him this afternoon one might have thought that regional assistance in Scotland had been increased by the Government. The reality is that four areas in Scotland have been upgraded, as was mentioned by the Secretary of State, but no fewer than 42 areas have been downgraded. It would have been nice if the Secretary of State had read out a list of the areas downgraded as well as a list of the areas upgraded.
The Government reduced the grants for building, plant and machinery from 20 per cent. to 15 per cent., which affected every development area. There was a deferment in the payment of regional aid, which cost Scottish industry £40 millon in the past year. The changes announced last July meant that regional aid was cut from £150 million to £105 million a year, which is a reduction of 30 per cent. It is no wonder that Scottish industry does not wish to invest.

Mr. Ian Lang: The right hon. Member obviously feels strongly about regional aid. Has he forgotten that in 1977 the previous Labour Administration, almost overnight, abolished the regional employment premium? That militated strongly against Scotland, which received almost 50 per cent. of the total. The effect was about £75 per employee in Scotland compared with £42 per employee in England. That led directly to a loss of 20,000 jobs.

Mr. Milian: The previous Tory Government announced that they would abolish the regional employment premium in 1974. It was not abolished, because a Labour Government were returned to office at the 1974 election. I hope that every hon. Member will be in favour of a strong regional policy.
The regional employment premium was replaced by other benefits to industry. The reductions in expenditure in the current year have not been replaced. They were not the only savings that were made at the expense of Scottish industry. The hon. Member for Galloway (Mr. Lang) should ask Scottish industrialists. what they think about the Government's action on regional policy.
The SDA budget has been reduced for the current year, and the Govern-

ment have produced industrial guidelines that the Secretary of State has admitted are intended to make the industrial activities of the SDA an ancillary function, whereas they were previously the prime function of the SDA.

Mr. Younger: indicated dissent.

Mr. Millan: That is true. The provision of factories, while important, could be done, and was being done, by other agencies. The industrial investment function of the SDA was its prime objective. The Secretary of State has cut the budget not only in the current year but in the next year.
I wish to draw the attention of the House to one interesting event. In an equivalent debate to this on 4 February, the Secretary of State for Wales announced that the WDA would receive an additional £48 million over the next two years to deal with the difficult economic and industrial circumstances in Wales. It would have been encouraging for Scotland if the Secretary of State had been able to announce this afternoon that additional money would be available to the SDA. The right hon. Gentleman has a record of unmitigated failure in these matters. On any issue that arises where Cabinet decisions are involved, the Secretary of State loses out. If an additional £48 million is to be provided for Wales, why is there not something additional for Scotland?

Mr. Younger: I would have thought that the right hon. Gentleman would know from his own intelligence that there is a vast problem of steel closures in Wales. I am glad that the Government have been able to provide money to help Wales.
I made it clear in my speech that the SDA had more money than it could spend. It will have more money to spend in real terms this year than it has ever had before.

Mr. Millan: That is an interesting answer. The right hon. Gentleman has confirmed what I said. Wales is to receive additional money because of its serious industrial problems. The right hon. Gentleman obviously does not think that Scotland has serious industrial problems, while the rest of us believe that Scotland has extremely serious industrial


problems. If he were doing the job for Scotland that he ought to be doing he would have obtained additional money for the SDA. We have heard another confession of failure from the right hon. Gentleman.
What success has the right hon. Gentleman had on the question of small firms? I do not remember a speech of the right hon. Gentleman in which he has not said "If only every small firm in Scotland would engage one additional employee, the Scottish unemployment problem would be solved". That is about as sensible as saying "If every small firm in Scotland dismissed one employee, unemployment in Scotland would be doubled".
The small firms employment subsidy was directed specifically towards small firms taking on additional employees—something that the Secretary of State said he was anxious to encourage. The subsidy meant that for a small firm taking on additional employees there would be a payment for 26 weeks of £20 per week for each additional employee. One would have thought that that was exactly what the right hon. Gentleman wanted. How-every, the small firm subsidy has been abolished. The right hon. Gentleman had the impertinence to say that it was not a cost-effective scheme. What are the Government putting in its place? The answer is, absolutely nothing.
That is not the end of the story about the way in which the Government have treated industry in. Scotland. They say that they wish to encourage small firms. The encouragement in Scotland is the removal of the small firms employment subsidy. We all wish to encourage oil-related industry in Scotland. When the Government came to power they inherited from the outgoing Labour Government the interest relief grant scheme, which had been an important financial inducement to industry in Scotland. It enabled Scotland to build up the amount of oil-related employment to between 55,000 and 60,000 jobs. Some months ago the Government announced that because of EEC pressure they intended to abolish the scheme from 31 March 1980. When the House was in recess they announced that they were abolishing it retrospectively from July last.
The scheme has been abolished because the Government wished to save

money and because there was pressure from the EEC. They are spineless in their dealings with the EEC. The French Government have not lifted the lamb ban, yet France was one of the countries agitating within the EEC for the abolition of the interest relief grant scheme, and the Government caved in. That scheme has been lost. It was an important scheme from the point of view of encouraging oil-related jobs in Scotland.
We had the fiasco of the Civil Service dispersal programme. It is now to produce only 1,400 Ministry of Defence jobs, but we are not even sure that we are to get them. If we do, it will be in 1986. In any case, long before that there will be Civil Service reductions in Scotland of more than 4,000. That will be several times more than the additional Civil Service jobs that we are to get under the Civil Service dispersal programme.
There was the Inmos project, which was started by the Labour Government. The understanding was that the first manufacturing part of the project was to be in a development area. The Government did not try to get the first part of that project sited in a development area: it went to Bristol. I mean no disrespect to Bristol, but that scheme should have gone to a development area. When I wrote to the Secretary of State and pointed out that there was an undertaking by the previous Labour Government that that scheme would go to a development area, I got back what I think the Prime Minister would call a "wet" letter saying that this was a matter for the management of Inmos, and that it had nothing to do with the Government.
These are important jobs in the microelectronics industry. The right hon. Gentleman mentioned this matter as being very important. Jobs that should have gone to Scotland or to another development area have gone to a non-development area. The right hon. Gentleman did not even put up a fight for them, and he wrote this extremely complacent and silly letter to me.
We have had that kind of response on numerous occasions. We had it in regard to industrial closures. The Secretary of State said that he was unhappy about the closures, that he was anxious to do everything possible—apart from anything positive—that they are terrible tragedies, and that he would do everything possible


to get alternative jobs. The right hon. Gentleman this afternoon mentioned one or two instances where he has been able to step in and be helpful. Consider the examples that he gave. First, Marathon. Marathon would not have been there unless it had been rescued three times by the previous Labour Government—the last occasion being a month or so before the general election.
Caberboard, at Cowie, was rescued by the previous Labour Government. But the right hon. Gentleman has been able to come in with a secret press conference. A notice was issued to the press to the effect that if representatives would meet the Under-Secretary on a particular day he would have something of tremendous importance to tell them. It was so secret and important that he could not tell them in advance. It turned out to be Government money going into a project started by the Labour Government.

Mr. Canavan: Does my right hon. Friend agree that it was absolutely disgraceful that the Minister should use that press conference to launch an attack on the trade union movement and to claim that the existence of the factory at Cowie was a victory for the German company over the trade union movement? If it had not been for the tenacity of the trade union movement and the parliamentary pressure that my colleagues and I put on the previous Labour Minister of State at the Scottish Office, there would have been no capability for manufacturing chipboard at Cowie at all.

Mr. Millan: My hon. Friend is absolutely right. I remember the meetings that I had with him when the original difficulties arose at that factory.
On all these matters we have little sign of real initiative and enterprise by the Government. A working party has been established, and we welcome that. I suppose that that is better than no working party at all. My hon Friend the Member for Dunbartonshire, Central (Mr. McCartney) tells me that the Clydebank working party does not have an office there. Not one job at Singers has been replaced, despite the efforts of the working party. Indeed, no new jobs have been created to replace the lost jobs at Massey-Ferguson, in Kilmarnock, despite the efforts of trade unions and others.
The moral is that we must fight for the retention of every job in Scotland. If we adopt the attitude that it does not matter if jobs go as long as we can get jobs to replace them, we shall be fooling and deluding ourselves. That in turn will lead to disillusionment among trade unions and others. Alternative jobs are difficult to obtain. If they can be obtained, they should be obtained whether or not we are losing jobs. Scotland is losing jobs at an extremely worrying rate. The Government make a fetish of nonintervention, although every industrialised country in the West—and Japan, and other countries—adopts an industrial interventionist policy. Without an interventionist policy there will be no hope for the United Kingdom, and there will certainly be no hope for Scotland.
During the election we forecast—and the Scottish electorate supported us—that the return of a Tory Government would mean industrial disaster for Scotland. The only respect in which we were not accurate at the election was that the disaster happened a good deal sooner than we expected last May.
We need a complete reversal of Government policy in the widest area of economic strategy, particularly in the industrial area. Unless we have that reversal of policy Scotland will go into an irreversible industrial decline. That will be the legacy left to Scotland by this disastrous Tory Government.

Several Hen. Members: rose—

Mr. Speaker: Order. As the House saw, more than 30 right hon. and hon. Members hope to participate in a debate that will last about three hours before the closing speeches.

Mr. J. Grimond: If we are to improve economic performance in Scotland and put a curb on inflation we must, as the Secretary of State said, reduce the non-productive use of resources, especially by public authorities.
I should like to make several points on that matter. First, it is reasonable to give local authorities more flexibility. However, it seems unreasonable to tell them that they cannot spend the money that they raise. Much local authority expenditure could be eliminated to the advantage


of the community. But if a local authority is prepared to raise money on the rates and does not come to the taxpayer. I do not see why it should not be allowed to do so.
I hope that we shall have an assurance from the Government that they will not penalise authorities which have been economical in the past, but in view of the manner of the cuts they may end up by doing that.
I should also like an assurance that the Government will not give special grants for large unproductive capital projects, such as the building of offices. There are some signs that they are willing to do that. Services are being cut while offices and staff increase.
The cuts in general are not cuts but reductions in extra money provided by the Government. I was alarmed by one remark made by the Secretary of State, and I hope that in winding up the debate, the Minister will put it right. The right hon. Gentleman seemed critical of the Scottish Development Agency because it underspent. One of the most disastrous aspects of the grants system is that every authority believes that it must spend to the absolute maximum, whether or not it has any good projects. I hope that the Government will congratulate the SDA on not pouring out public money if it has no viable projects before it. In this regard, too, I hope that the Government are looking at the grants system, which is extremely wasteful.
The Secretary of State pointed out that 60,000 jobs had been created in Scotland through oil and oil-related industries. I hope that we shall be told whether these are jobs for Scotsmen. For example, at Sullom Voe, in my constituency, at least half the workers in oil-related jobs do not come from Scotland. Are these 60,000 jobs for Scotland or for Britain?
Incidentally, with regard to the future of the various grants that are being tailed off, I hope that the Government will find means of discriminating between regions. The regions with oil-related industries will require grants in four or five years, when the oil construction period is over, and possibly later when the oil itself is running down. I suspect that the grants will probably continue and then tail off, but in some regions that may be the wrong way round.
If we are to have a reduction of Government assistance to some areas—I do not complain about that—it is all the more necessary that we should look at the services in those areas, particularly transport. High transport costs and the difficulties of moving goods are handicaps under which the Scottish economy labours. There is great scope for expanding train services throughout Scotland. I regret the closing of some of the services in the Borders and in the North-East of Scotland.
The Secretary of State mentioned the importance of tertiary industries, among which is tourism. I am not a wholehearted enthusiast for the indefinite extension of tourism. I sometimes feel that we need an anti-tourist board as well as a tourist board. However, it undoubtedly brings much money into many parts of Scotland, particularly the Highlands.
The railways north of Inverness are museum pieces. It is amusing to travel on them, but profoundly irritating. They are no better than they were 100 years ago. I am told—I hope that it is not true, and perhaps the right hon. Member for Western Isles (Mr. Stewart) will correct me—that at one point the crew have tea during the journey, leaving the train and going to a neighbouring farmhouse. I cannot swear to the truth of that, but sometimes one would think that it is so. The train stops not only at every station, but frequently between stations.
I should like sleepers to run north of Inverness. I am amazed at the time that journeys take. It still takes five or six hours to cover 120 miles. I am also amazed at the apparent lack of effort by the railways to gain more of the goods and livestock traffic. Because of the increasing cost of petrol, the railways have a great opportunity in the rural areas of Scotland. As the Secretary of State said, the rural economy is of prime importance to Scotland.

Mr. Robert Maclennan: As a fellow sufferer on the line about which the right hon. Member is talking, may I ask whether he acknowledges that when the matter is raised with the Government they treat it as a matter for the management of British Rail, and British Rail treats it as a matter of cash limits imposed by the Government? The


latter seems to be the more plausible explanation.

Mr. Grimond: I am obliged to the expert on railways. Whoever is ultimately responsible, I feel that improvements could be made.
There has been a great deal of road and motorway building in the centre of Scotland, but it is still largely unjoined to the roads to the South. There are some gaps between the main motorways in England and those in Scotland.
In my view, the airways will price themselves out of ordinary business in Scotland. They will soon be used entirely by expense account travellers and public officials. Incidentally, I welcome the offer of a grant of £2·5 million for the Highlands and Islands airports, and I hope that the Government will say more about how it is to be divided up. It is a step in the right direction.
British Airways have made nine increases in fares to Orkney and Shetland in the last four or five years, ranging from 7½ per cent. to 15 per cent. That is far in excess of inflation. In spite of numerous courteous explanations from the nationalised organisations, I still think that their policies are wrong. For instance, British Airways have enormous traffic to Shetland in oil, but it is creamed off to charters. The scheduled services are not gaining the profits that could be made. The CAA says that it is charging the oil companies for the new terminal at Wilsness in Shetland but it should be making a large profit on the whole aerodrome at Sumburgh. British Airways should be making such a profit from its monopoly position that it could afford at least to hold the fares on scheduled services and to hold airport charges. The CAA proposals for increases in airport charges are astronomical. The CAA and British Airways are putting too much extra expense on the ordinary traveller. They should be making a profit out of the oil companies.
Scotland suffers from the same disease as the rest of Britain. State Socialism, with its enormous nationalised industries, has failed, not only because it is incompetent, but because it has made no difference to industrial relations. One of the promises of nationalisation was that it would improve industrial relations. It

does not happen. Too many trade union leaders seem to spend their time disrupting production, instead of improving it. Sometimes the unions seem to be set on a course of mass suicide. That is not inevitable. It has been shown, not only by small firms, but by some large firms, that if a business is broken up into manageable units and there is contact with the labour force, extremely good working relations can be established.
There are at least three large international companies in Scotland which have good working relationships—Occidental Oil, IBM and ITT in the Borders—and which are bringing about the sort of change in the economy which the Scottish Office wishes to see. They work in small units, and they are careful to carry the labour force with them when they are introducing new techniques. Good relations with labour can be established in many ways. One way that is particularly appropriate to Scotland should be the encouragement of industrial co-operatives. I do not say that they will solve our troubles, but that is a good way of associating the workers in ownership and management of their business and giving them a real interest in it. After all, it is they who depend upon it for their livelihood.
A good deal of management is virtually a bureaucracy. It moves from place to place. It is not interested in the community. Co-operatives will not mean that workers will run the business or manage it, but they will have a say in appointing the management, and have continual interest in how it performs. Increasingly, workers are wanting to be treated more as owners than as mere hands. It would be sensible to make some parts of nationalised industries into co-operatives. It would be sensible to encourage workers to put redundancy payments into their own businesses. Some are willing to do that. It would be sensible to give MG cars, for instance, to the workers, and to give other parts of the nationalised industries back to the people who work in and depend upon them. Such a development would be peculiarly appropriate to Scotland, which has a long tradition of a more widespread democracy than England.
The group of co-operatives in Man-dragon, in Spain shows what can be done if the sort of patriotism that has erupted


in Scotland during the last four or five years is harnessed not only to political but to industrial effort. Instead of seeing their savings siphoned off to Madrid, instead of seeing their business closed down by Madrid, the Basques have taken the matter into their own hands and have put their savings into their own businesses. They have 66 successful co-operatives, financed by their own bank, all of which are controlled by the workers. That is the sort of development that I should like to see.
The previous Government set up the Co-operative Development Agency. There is the Scottish Co-operative Committee, and I am chairman of an organisation called Job Ownership Limited—JOL. We all work to the same end. As we are in favour of co-operation, we co-operate together. But we need changes in taxation, more Government support and other changes in legislation.
I am not saying that that is the only way of running industry, but the appalling situation that exists in British industry, in which the trade unions and the management are at perpetual loggerheads, must be broken down. One way of doing that is to get the workers to put their energy and ability into making industry more efficient, instead of disrupting it.
I should have thought that my proposals would be in accord with Government policy. They would improve it. They would not run contrary to it. I do not think that the Government can be satisfied that they have got their finger on the real difficulty. It will not be cured by financial means. The trouble with the economy is political and industrial.

Mr. Alex Pollock: It is timely to have this debate about 10 months after the Government came into office. We all recognise that the Government have major economic problems, and only a political simpleton would suggest that there are instant solutions to them. That is recognised by the country at large, and that is why there is still a tremendous ground swell of good faith among people in Scotland for the attempts that the Government are making—

Mr. Canavan: Where?

Mr. Pollock: In Moray and Nairn, and in many other parts of the country. It is important to remember that if we are to maintain that good will the people who are prepared to give us their backing must have a strong sense of reassurance about the future direction of the country. What concerns me, after these 10 months, is the slight hint of anxiety and worry on the part of certain people who are otherwise happy to back the Government but who are concerned about the implications of certain aspects of their policy. I should like to touch on one or two of those aspects.
The farming interests in Scotland are puzzled about why, with their production record, which is second to none, they are not doing as well as they should be. The fishing industry is in a parlous state. It is worried about how it will rescue itself and get back on fair and level terms. Perhaps more serious than those worries are those of people in rural areas about the future of the institutions that are essential for the existence of a healthy rural economy. I am referring not only to pure economics but to the ancillary opportunities that are necessary to keep people in the countryside.
Today we have seen a mass lobby by the sub-postmasters. They are not concerned only for their jobs and those of their employees. They recognise that the changes could have harsh consequences for the social fabric of small communities.
Another area of worry, upon which I shall dwell for a moment, centres on the future of health provision in the rural areas. My hon. Friend the Under-Secretary is well aware of the problems that are faced in the Grampian region. There is the prospect—I am happy to say that it remains only a prospect—that a number of small maternity units will be closed. This is not simply a question of cash. It has much wider ramifications. If there are to be such closures, many men who work in the distilleries and on the farms will find that their wives are not prepared to take the risk of remaining in isolated communities far from medical help.
I should like to give an incidence from my personal experience. In early December of last year my wife, who was expecting our second child, went into labour


in the early hours of the morning. We had the choice of taking her from Forres to Raigmore hospital in Inverness or, if the labour was more rapid than we expected, to take her a quarter of a mile up the road to the cottage hospital. In the event we made it to Rakemoor and the child was delivered there, but if the delivery had been more rapid and sudden and the cottage hospital had been closed down my son could well have been born in a layby. We do not wish to lose that sort of facility in the rural areas, and therefore I sound a note of caution to the Government. They should have regard to the full implications, in social and democratic terms, of the closure of maternity units.
For the same reasons, we must be careful to maintain facilities for the mentally handicapped. Social cohesion applies not only to the mentally sound, but perhaps more especially to those with mental problems. Families in rural areas who have to contend with difficult weather conditions in winter would be most reluctant to face the prospect of being able to see their children in, say, Aberdeen only infrequently rather than being able to see them at locally-based centres.
There is a prospect that the west district of the Grampian health board will be dismantled under the restructuring programme. I assure the Government that the west district works well and that it has the confidence of local medical practitioners. It has a sound record of administration, and it has the co-operation of specialists and GPs alike. To put that at risk by an obsession with a policy of centralism would do more harm to medical provisions at local level.
The conclusion that I wish the House to draw from my remarks is that people in rural communities recognise that there are times when a price has to be paid for the provision of essential public services, but that they are not prepared to accept the removal of those facilities themselves. That is a cost that is much more expensive than pure economics. I hope that my hon. Friend the Under-Secretary will give us the necessary assurances that the Government do not intend to preside over the future depopulation of the rural areas and turn them into tourist traps. I hope that he

will tell the House that the Government are committed to make sure that every effort will be made to retain the full provision of services that are needed to keep the rural areas healthy and viable.

Mr. James Hamilton: I have heard many debates on the Scottish economy since I came to the House. I have heard many Secretaries of State opening such debates. I must honestly confess that the speech of the Secretary of State for Scotland tonight was the most depressing one that I have heard in all the years that I have been in the House of Commons. There seems to be no hope at all for Scotland.
Reference has been made to the Scottish unemployment figures. I should like to refer to the figures for Lanarkshire, with reference to a question that I recently put to the Under-Secretary of State for Scotland who has particular responsibility for industry. At 10 January, in Lanarkshire, 24,042 people were unemployed. That represents 13 per cent. of the insurable population in North Lanarkshire and 12·3 per cent. of the insurable population in South Lanarkshire. The tragic part of that is that 1,960 of those unemployed persons are school leavers. With the present Government's policies—if they have any policies—the outlook for school leavers is bleak. The Government have departed from the proposal, under the job creation scheme, of people retiring. They have increased the age from 62 to 64, which means that many young people will find it more difficult to find employment.
Reference was made to a forecast by my right hon. Friend the Member for Glasgow, Craigton (Mr. Millan). The forecast predicted that by 1981, 2 million people will be unemployed in the United Kingdom. On the basis of past figures, we can assume that by 1981 about 300,000 or 350,000 people will be unemployed in Scotland. The Government have reduced grants to industry by £225 million. The reduction for Scotland is £45 million. In the past, Scotland has operated on the basis of receiving one-tenth of the grant allocation, yet the £45 million represents one-twentieth. That means that the Secretary of State for Scotland, at Cabinet level, has not been fighting for the interests of Scotland.


That is to his eternal shame. He now has the opportunity to put forward the strongest possible case for the Scottish economy.
I know that we are in keen competition with Eire as far as jobs are concerned. I also know that the previous Labour Government had difficulties. When we speak of redundancies we do not refer to the now common policy of natural wastage. Virtually every day of the week redundancies are announced. Those redundancies are put down to natural wastage. Those jobs will never be redeemed or filled again.
I am particularly concerned about the construction industry. We are now clamouring for more houses and more schools. In my area and that of my right hon. Friend the Member for Lanarkshire, North (Mr. Smith), two major schools have been axed by a regional council simply because money has not been made available by the Treasury. That will not be of any educational advantage to our children. Nor will it help the construction industry.
My next remark might be taken as criticism of my trade union colleagues. During the past two or three years, many companies—particularly in the private sector—have inflated the redundancy payments that are permissible under Government schemes. Before I came to the House we fought for every possible job. However, those made redundant now receive tangible redundancy payments. The fight is therefore lost before we begin. I therefore say to my trade union colleagues that we shall live to regret this practice. It is not in the interests of jobs in Scotland.
We have not given sufficient attention to the distributive trades, many of which serve a useful purpose. They supply many jobs. The other week I was talking to a representative of one of the distributive trades in my constituency. I discovered that the rent for his premises had been increased by 134 per cent. I have re-feted to that for a good reason. The Government should recognise that the Scottish Development Agency is now examining the rents of those who have been in factories for between 20 and 25 years.
One industrialist told me that the figure that he has received will mean an increase of 600 per cent. in the rent now paid. That refers to one, of the large industries in Lanarkshire.
If that trend is allowed to continue, many firms will move from larger factories into smaller factories. There will be a contraction in the work force. It will also cause great difficulty to the export drive. I hope that the Government will take cognisance of that. I hope that they will hold discussions with the Scottish Development Agency and that they will curtail these severe increases to the best of their ability.
During the past two or three weeks many of us have made references to the retraining of personnel. I visited a skill-centre. I recognise that that is not within the province of the Secretary of State for Scotland, but he should be interested. As I went round the skillcentre I noticed an area for training horizontal borers. Before embarking on that course one must be a tradesman. There is a shortage of horizontal borers in Lanarkshire. Many industrialists are allowed to sponsor individuals so that they may attend those courses. I am attempting to be constructive. I hope that the Government will give some attention to these issues when they are discussed at Cabinet level. We cannot afford to close skillcentres in any part of Scotland.

Mr. Ernie Ross: Will my hon. Friend also remind Conservative Members of the success rate of skill-centres? The skillcentre in Dundee has a success rate of 70 per cent. when placing individuals in jobs after training. This is a crucial area of concern.

Mr. Hamilton: That is the point that I have been making. Reference has also been made, quite correctly, to the steel strike. Lanarkshire and Ayrshire suffer tremendously from the dispute. Many of us have told the Prime Minister, the Secretary of State for Industry and the Secretary of State for Scotland—who is a member of the Cabinet—that unless there is Government intervention those men will not return to work. The sooner they get that into their brain boxes the better. The Government say that no more money is available. However, the TUC has done everything humanly possible. Jim Mortimer and his team have also done everything humanly possible. At the moment, ACAS has got them round the table. The Secretary of State for Industry must be seen to be active. The steel industry is one of the basic industries


in Scotland. If we lose that industry, ad the others will fall by the wayside.
Steel closures have taken place throughout the United Kingdom. A tube section of that industry is in my constituency. Unless we get a multi-pass mill within the next five years we shall witness the demise of the tube-producing section in Scotland. The Government must pay attention to that. They tell us that £450 million has been set aside for the social consequences of redundancy and for future developments. The Secretary of State for Scotland seems to be deeply concerned about the Scottish economy and unemployment. I hope that he will make the necessary move within the Cabinet so that the BSC decides to spend that money.
It is not all a dismal story. Many of the companies in my area have success rates. The hon. Member for Edinburgh, North (Mr. Fletcher) went to America amidst a great deal of razzmatazz. He returned and told us that many jobs and companies would come from America. When the hon. Gentlman winds up the debate I want him to tell us how many companies and jobs are coming. During his visit he did a great disservice to the Scottish Development Agency. He played it down tremendously. As a result of this Government's policies the Scottish Development Agency is not given the recognition that it deserves.
I am aware that many of my colleagues wish to participate in the debate. I therefore ask the Minister to give us the answers that we seek. He should give them truthfully, for a change. If he is truthful with us—if that is humanly possible—he may get some co-operation from us at the end of the day.

Mr. Michael Ancram: I enjoy listening to speeches from hon. Gentlemen who served in the previous Government. It is difficult to work out whether they speak with such seriousness because they do not remember what things were like when they were in Government or because they continually have nightmares when they do.
I hope that the hon. Member for Bothwell (Mr. Hamilton) will forgive me if I do not follow him. I wish to be brief and raise a specific issue that affects the pros-

perity and job prospects of people in my constituency, the city of Edinburgh and the whole Lothian region—the rate increase of 43 per cent. announced by the Labour-controlled Lothian regional council yesterday. On any view, that increase is unjustifiable, damaging and irresponsible.
I have listened carefully to the arguments put forward to justify it. [Interruption.] I am sure that the hon. Member will be able to comment in winding up. I believe that when he knows the facts he will agree that the increase is unjustifiable, damaging and irresponsible.

Mr. Buchan: I shall not be able to comment in winding up. The hon. Gentleman is perpetuating the gross hypocrisy that we hear from the Government Front Bench. The Government impose cuts on local authorities. When those authorities seek to defend their communities, which necessitates increasing rates, the Government attack them. I am surprised that the hon. Gentleman copies that behaviour.

Mr. Ancram: The hon. Gentleman repeats the arguments put forward by Lothian Labour regional councillors yesterday. I do not find such arguments convincing.
Councillor Peter Wilson had the courage to resign, because he realised that the increases were unjustifiable. It is interesting to note that there are such people in the Labour Party in Edinburgh.
The increase in unjustifiable. I do not believe that Lothian region has made any attempt at economies. We hear talk of trying to avoid damaging cuts, but there appears to have been not attempt to cut out waste in the duplication of effort between region and district. There is no sign of attempts to cut unnecessary spending in Lothian region's own empire.
Last year Lothian region's staff establishment went up by 1,300, which was 200 more than the region's projected figure at the beginning of the year. In a year of growth that figure is substantial, but, at a time when other regional councils in Scotland are trying to make economies, it indicates that the region made no attempt to cut spending.
We should also consider unnecessary projects. I am accused of raising this topic all the time, but I shall raise it again. The region is spending £250,000


on an escalator at Haymarket station at a time when there are far higher priorities. If the money is spent, it should be spent on projects with higher priorities.
Even the Labour-controlled council in Strathclyde has made efforts to economise. The Secretary of State will recognise those efforts.
What does Lothian regional council do? The hon. Member for Renfrewshire, West (Mr. Buchan) argued that the region is forced to put up rates because of Government policies. However, Lothian opts for new growth. It spends extra money at a time when other authorities are at least trying to make the economies that the Government seek.
The council is showing contempt of ratepayers' pockets. I do not believe that that will go unnoticed by the people in the city of Edinburgh and the Lothian region. The authority may feel that people in council estates will not notice, because they pay their rates and rents jointly. They will think that it is part of a rent rise. From letters that I have received over the past two weeks, I believe that the district elections in May will prove that wrong.
The increase is damaging. It will have a serious impact on job prospects in Edinburgh. The other day, the Edinburgh chamber of commerce predicted that, if the rate increases went ahead, 4,000 jobs would be lost within the city.
The right hon. Member for Glasgow, Craigton (Mr. Millan) mentioned special development area status. Lothian region is arguing, because of job difficulties, to retain its development area status. It now appears to be demonstrating a disregard for retaining jobs.
I am sure that hon. Gentlemen will will have read the report in The Scotsman that senior industrialists in the city of Edinburgh say that such rate increases will make them think seriously about their industries within the region.
It is often forgotten that it is not only the well-off who pay rates. The people hit hardest by rate increases will be those at the bottom of the scale, who have a full rate rebate but who will have to bear the increase. We hear much about Socialist compassion from the Opposition Benches. Where can that be seen here? The increase is irresponsible.

Mr. Gavin Strang: Does the hon. Gentleman accept that, without the increases, there would be substantial rises in bus fares, cuts in jobs for home helps, teachers and other workers, and cuts in services in the region? Will he face the fact that his Government's decision to downgrade Edinburgh's special development area status will do far more damage and make it virtually impossible to attract new investment in the years ahead?

Mr. Ancram: I have made it clear all along that I shall seek to ask the Government to reverse the decision on development area status. It is now far more difficult to argue that when Lothian region has shown that it has no interest in maintaining jobs.
It is fascinating that we never hear from the hon. Gentleman or from councillors in Edinburgh who are promoting the rate increases of intentions to cut back on administration, bureaucracy or waste. That is where savings can be made.

Mr. John Home Robertson: Will the hon. Gentleman give way?

Mr. Ancram: I shall not give way, as I do not wish to detain the House for long.
I believe that local government was given autonomy on the understanding that it would operate responsibly. We are seeing here a misuse of that autonomy, which has dangerous implications. It is a direct and apparently uncontrollable attack on the policies of an elected Government. It is an expensive political manoeuvre by the Labour group on Lothian regional council, with the ratepayers again footing the bill.

Mr. Robertson: Will the hon. Gentleman give way?

Mr. Ancram: I have given way to other hon. Gentlemen and I wish to continue.
All individual liberties in life are circumscribed within the bounds of responsibility. All autonomy given to local government must be on the same basis. Where irresponsibility rules and power runs amok, as appears to be the case in Lothian region, and where people can be hurt by the political whims of local


government, without redress or control—[HON. GENTLEMEN: "Oh!"] Hon. Gentlemen may say "Oh!" but they should talk to the ratepayers.
The whole system requires to be looked at again. It is no philosophical argument. It is a real and immediate problem, which the Government cannot afford to overlook. I welcome the Secretary of State's response to the increase yesterday, but if his existing powers to take action are not sufficient he must seek new ones.

Mr. Robertson: Will the hon. Gentleman give way?

Mr. Ancram: If the prosperity and prospects of the people of Lothian region are not to be irreversibly damaged, the Secretary of State cannot afford to wait. He must act swiftly. I hope that the Minister will confirm that that can and will be done.

Mr. Allen Adams: I listened with great interest to the Secretary of State's list of alleged economic successes in Scotland since he came to power. I think that we can deduce from the tenor of his argument that if a man opens his back kitchen on St. Kilda to produce milk bottle tops and employs a man and a dog, that will be regarded as a major economic success and a breakthrough for Scotland. Such were the trivia that the Secretary of State was speaking about, picking out minutiae in industrial expansion which have not meant anything in real terms for industrial expansion in Scotland.
One hesitates to use the word "capitalism" in this building in case the roof falls in and the clocks stop, although one might suppose that the clocks have already stopped for many Members on the Government Benches. I shall substitute the words "market forces", which seem to be more socially acceptable. The one thing that has failed Scotland has been market forces. The one significant factor that has consistently and persistently let Scotland down has been private enterprise. The biggest of these private enterprise companies have resisted most attempts by all Governments to push, to pull, to cajole or to direct them into Scotland. In fact, at the moment, most

of them cannot get near enough to Brussels or to the cheap labour markets in Taiwan and Korea.
The decline that has occurred in the traditional private sector in Scotland—and we must be honest with ourselves—can to some extent be laid at the door of our fellow Scots—the people who owned the shipyards, the foundries, the engineering works and the mills, and who made a great deal of money from the sweat of our fathers' brows but never reinvested a penny of it. Today, many of our manufacturing concerns are operating antediluvian machinery in Dickensian buildings. Small wonder that they cannot compete, whilst their owners are still waving their Union Jacks, or their Saltires, or whatever it might be, and telling us that it is nothing to do with them. According to them it is the fault of the lazy workers, yet they are merrily investing their profits abroad in Japan, Korea and elsewhere. The manufacturing concerns in those countries then sell their products to us and put our workers out of a job.
I worked in the shipyards for a little while and I can remember cursing the Renfrew ferry at half-past seven o'clock on cold January mornings on my way to shipyards in which the Japanese, had they gone to work in them, would not have produced a canoe. The shipyards are a very good example, because their owners made a fortune in the post-war boom. After so much shipping had been sunk during the war, a great deal had to be put in its place. The owners made a fortune, but they never reinvested a penny in the shipyards, and whereas once we had 13 shipyards on the Clyde, we now have three. This is not the fault of the workers. It is another classic example of the failure of private enterprise to invest in the Scottish economy.
Another more recent example is that of Singer at Clydebank. No wonder it could not compete. The factory needed not a few million but perhaps £10 or £15 million invested in it to make it competitive.
The Government are saying that they believe in the dynamic effects of private enterprise. Could they spell out precisely to the Scottish people what they mean by the dynamic effects of private enterprise and of private capital? Can they


point to one example of a major manufacturer coming to Scotland of his own free will, with neither State aid nor State support? Can they give me one example of private enterprise coming to the aid of Scotland in that way?

Mr. Iain Sproat: The hon. Gentleman says that free enterprise has failed Scotland. Is he not aware that the biggest success story in Scotland has been the provision of 60,000 jobs as a result of North Sea oil, and that 97 per cent. of the investment in North Sea oil comes from free enterprise? That is the classic example of free enterprise working in Scotland.

Mr. Adams: I think that the hon. Member should research the oil industry a little more, because if he does he will probably find that British Petroleum has played a significant part in what has happened and that many of the oil companies are making their present profits with State assistance.

Mr. Buchan: Does not my hon. Friend think that God also helped a little?

Mr. Adams: There is no doubt that private enterprise did not put the oil there in the first place. I agree with my hon. Friend that our present situation with regard to North Sea oil is due more to good luck than to guile.

Mr. Younger: If it had been left to God the oil would still be under the sea. Due to private enterprise it has been brought up and used.

Mr. Adams: The private enterprise that is producing the oil has not been averse to taking public money to help it to produce it. I think that I made that point when answering the hon. Member for Aberdeen, South (Mr. Sproat).
What we in Scotland need is not a reduction in regional grants but a major expansion of them. As I tried to illustrate, private industry responds to Scotland's needs only when it receives grants and direction from the State. We want more of that from this Government, not less.
Nor do we need the closure of training centres for our young people. Youth unemployment in Scotland is a national disgrace. What we should have seen from the Government is an expansion of the programme to help train young people

for industry, rather than a diminution of that service. This is an absolute disgrace, for which the Scottish people will not forgive them.
We do not need a reduction in public expenditure in local government, which is now one of the major employers in Scotland. It provides many essential services for the sick and the elderly, and with a population which has a higher percentage of elderly people in it every year, we need major expansion of this work. One would have thought that the Government would learn a lesson from President Roosevelt, who saw that one of the ways out of the depression in America in the 1930s was to spend money in the public sector. One way of doing this would be to put more money into direct labour forces in local authorities. It cannot be argued that there is nothing to do in housing in Scotland. We still have one of the worst housing records in Europe, and by investing in that sector we would improve that record and at the same time alleviate the problem of unemployed building workers. It seems to me outrageous that whilst so many of our fellow Scots live in appalling housing conditions we have building workers on the dole.
The Government have not learnt many basic lessons from the past. They have not learnt that one of the ways out of economic recession is by investment in the public sector. They certainly have not learnt that private enterprise has failed Scotland miserably in the past and that the only way the Scottish economy will recover is by State aid, State support and State direction.
We should learn also from the Irish experience. The Government ought seriously to consider giving major tax concessions to industry willing to come to Scotland. There must be a major expansion of the new electronics industry. I do not accept that this industry has expanded to any extent in Scotland. I should like to see the Government becoming involved in the microprocessor industry in Scotland, although that might sound a little doctrinaire for them. However, I do not think that that kind of industry will come to Scotland of its own volition. It will have to be pushed, pulled and cajoled.
The basic feature of private enterprise is that it gravitates to where it can get


raw materials more quickly and more cheaply, and to the major markets. Two examples are the South-East of England and the centre of Europe. Those are two natural gravitational pulls. The job of a responsible and reasonable Government is to counteract those pulls.

7 pm

Mr. Barry Henderson: I was astonished to hear some of the comments made by the hon. Member for Paisley (Mr. Adams). They represent such fundamentalist, old-fashioned and out-dated Socialism that even some of his hon. Friends would not want to go far along his route.

Mr. Canavan: We do not want capitalism.

Mr. Henderson: I am a modem style capitalist. I hope that the hon. Member for Paisley will forgive me if I do not take up directly his line of thought.
First, I shall make a few comments which I hope my hon. Friend the Under-Secretary of State will pick up when he replies. I shall refer to East Fife specifically before considering how the situation may be impacted by a number of national policies.
The strength of the economy in East Fife is the diversity of employment and the number of small businesses in the area. Many of them are owner-managed, and none has more than 500 employees on one site. The hon. Member for Berwick and East Lothian (Mr. Home Robertson), who seems to have joined the Tribune Group below the Gangway, extracted with great skill a fortnight ago at Scottish question time an answer from my hon. Friend that contained important figures that indicated that in his constituency unemployment has been reduced significantly since the Conservative Government came to power. I am happy to say that the same is true in my constituency. I suspect that that is so for similar reasons—namely, the effectiveness of small businesses and private enterprise working effectively even in difficult times.
Agriculture remains the backbone of the economy in East Fife. I hope that my right hon. Friend the Secretary of State will use all his considerable influence in the Cabinet to reduce the effect of capital taxes and to remove the threat

to the family farm, which still remains following the economic measures of the Labour Government.
I am sure that my right hon. Friend will also bear in mind the considerable concern that exists within the fishing industry. I am sure that he has that in mind as he was visited recently by some of my fishing constituents. It is essentially a free enterprise and profit-sharing industry. It is a hazardous industry. There is no living in the industry unless fish are landed and sold. I know that my right hon. Friend is conscious of the deep crisis that has suddenly hit the industry. I hope that he will move with speed to make a positive response to the crisis that faces the industry.
My right hon. Friend mentioned the prospects of a major microelectronics application centre. I look forward to seeing that development in Scotland. I hope that my hon. Friend will be able to assure me that the important merits of Fife for the centre of such a development will be properly recognised. I note that the hon. Member for Fife, Central (Mr. Hamilton) is in the Chamber. The hon. Gentleman represents among other places Glenrothes new town, which has many of the facilities that a microelectronics centre will want to have around it. In East Fife we have St. Andrews university, a major centre of excellence. It is possible that there is nowhere in the world doing more advanced work on the materials on which chips are based.

Mr. Canavan: Fish and chips?

Mr. Henderson: I must tell the hon. Gentleman that the chairman of the Potato Marketing Board lives in my constituency. I was referring to microelectronic chips and microcircuits. As I have said, we have a centre of real excellence and expertise at St. Andrews. Across the bridge at Dundee there are considerable resources at the University, which would be helpful to the development of microelectronics in Scotland.
Glenrothes, St. Andrews and Dundee form a triangle that would provide an attractive home for the development to which my right hon. Friend referred. In addition, we must not lose sight of the environmental attractiveness of the area, which would attract the sort of person who might want to come from outside


to contribute to the development. I hope that my right hon. and hon. Friends will ensure that the Fife area is carefully considered.
My hon. Friend the Under-Secretary of State will be aware that the regional development policy announced by the Government and the changes in development area status were not entirely welcomed in East Fife. However, I find the carping criticism of Labour Members intolerable. The fact is that the policy and the changes in status were good for Scotland as a whole. My constituency has not been helped, but I recognise that Scotland has benefited considerably from the changes in development status that were announced by my right hon. Friend.
We have received assurances from my right hon. Friend the Secretary of State for Industry as well as from my hon. Friend the Under-Secretary of State for Scotland that the Scottish Development Agency will not be prevented from doing its work within the East Fife constituency. I ask my hon. Friend to use his good offices to encourage the SDA, which currently has a commitment to provide advance factories at two sites in North-East Fife, to give an indication of the completion dates. One of them is at Cupar Road, Newburgh. It is time that the SDA indicated when it might be completed. The other factory is at Cupar itself. The site has only recently been acquired. In the light of the changes that are taking place, it is important for these advance factories to be completed as soon as possible so that the district has some positive industrial development to offer. We have the skills and the talents.

Mr. Gordon Wilson: And golf courses.

Mr. Henderson: Indeed. One becomes so accustomed to the excellence of these facilities that one sometimes forgets that others are not so aware of them.
I do not wish to give the impression that I am making carping criticism of the SDA. Last year I was impressed by the way in which it, together with the North-East Fife district council and private enterprise, co-operated to bring the Dreher factory to the station site at Anstruther. That was an excellent example of how an advance factory in the right place at the

right time, without necessarily long-term scope for Government money being pumped into the project, could bring about a satisfactory development of employment opportunities.
It is slightly unfortunate that the SDA leaflet which was published in February 1980, which describes some of the developments that it has available, does not feature East Fife, despite the fact that work had started. That is another reason why I hope that my right hon. Friend will draw the importance of the Agency's developments to the attention of the Agency. I hope that he will take steps to allay the fear that North-East Fife is the forgotten child of the agency.
The service sector of industry is also extremely important in my constituency. It accounts for about half the source of all employment. A healthy economic climate is required in which that sector of industry can prosper. For that reason, I should like to touch on some of the national policy aspects.
The first aspect is education. I was glad to hear my right hon. Friend refer to improved communication between the education system and industry. At the moment there is little doubt that the education system, particularly the higher education system in Scotland, is, in many ways, antipathetic to business and extremely sceptical about the benefits of profitable business. Our young people are not encouraged to look for a career in business as an honourable, effective and worthwhile way of earning their living and play their part in the community.
The education system has not encouraged the development in Scotland of entrepreneurial talent. Too many of those who should be leading the drive for the establishment of new and small businesses are encouraged to go into either nonproductive sectors of the economy or into very large companies, which often results in those people having to leave Scotland to further their careers.
The next major area upon which I should like to touch is communications. I hope that my hon. Friend the Minister will be able to give us some indication of when we can expect to see a more rapid development of the East Fife regional road. I hope that he has noted the economic effects of the unfortunate way in which we in Fife seem to be


enabling the nationalised bus group to earn a substantial profit when that is used either to subsidise the taxpayer or other loss-making enterprises in the public sector.
Another aspect to which I should like to draw the attention of my hon. Friend is contained in a letter that I have just received from the general manager of British Rail (Scottish region). This causes me concern. The letter was written in reply to representations I made to him on behalf of constituents and others about the poor timekeeping on the Aberdeen to London route that runs through East Fife.
Timekeeping on that route has been extremely bad. The general manager made no secret of the fact that he is also concerned about the poor timekeeping on this route. He assures me that he is taking steps to try to improve this. He also drew to my attention that:
quality and reliability are very much influenced by the ageing diesel locomotive fleet, the Diesel Multiple Units and carriages. Mostly, they are in the 18 to 20-year-old bracket and, frankly, it is becoming increasingly difficult to maintain such equipment at the peak of efficiency on demanding schedules.
I notice that the Opposition are holding forth from a sedentary position. I hope that they will recall that that occurred during the last five years they were in Government and it is the kind of thing that has been allowed to continue.
The general manager continues:
Indeed we know that an investment level some 30 per cent. higher than at present is needed just to replace outworn resources and we have repeatedly drawn this to the attention of successive Governments.
He goes on to say:
I cannot disguise my concern about the future of the provincial and local commuter services which, in large part, form the 'social' railway dependent on the Public Service Obligation 'Contract Price' paid by the Government.
Those seem to me somewhat ominous words. It is clear that under the previous Administration, as with so many other aspects of the economy, there has been considerable neglect. The fact that they allowed the economy almost totally to stagnate for five years while they doubled public expenditure makes it more difficult for my right hon. Friend to do that which I am sure he would like to do. Nevertheless, I hope that my right hon. Friend will recognise

the importance of communications to the Scottish economy.
My hon. Friend the Minister will be aware of the threatened and existing increases in air fares from Scottish airports. I am glad that the grandiose plans for a third London airport that have been sculling round for some time now have been scrapped in favour of the modest expansion of Stansted. However, I hope that my right hon. Friend, with his considerable knowledge of airports and the claims of Scotland's west coast international airport will ensure that everything possible is done to get the airlines themselves to disperse as far as is practicable from London direct services to North America and Europe. There is great scope for more of these services, not only from Scottish airports but also from other provincial airports in England.
It is also a cause for concern that the London-Scottish air fares seem to bear a heavy share of the burden of the costs of British Airways. I cannot remember having travelled on an empty shuttle for a long time. There is severe concern within the Scottish business community that the level of profit being made by British Airways out of the routes in and out of Scotland is unreasonable. That is disturbing, at a time when there are proposed increases in landing fees and security charges.
I should like some assurance that the security charges have been carefully checked. At times it seems that there are a lot of security people sculling around with nothing to do. As regards landing fees, I am told that the capital charges on new airport developments must be repaid over just seven years and that sale and lease-back arrangements are not allowed. I cannot imagine any other longterm capital building programe that is expected to show a return within seven years and I hope that my right hon. Friend will arrange to have that reviewed, if indeed what I have been told is correct.
One of the great characteristics of East Fife is that the population has very rarely gone on strike. The people earn their living by their own efforts, to a large degree. They work hard and they pay their taxes. As taxpayers they deeply resent the profligate use of their money in payments to those who ruin their own industries through


actions that would never be contemplated by a significant part of the community in East Fife. I hope that the Government will continue to press for a reduction of State monopoly, for good housekeeping in the public sector and for the reduction of taxes that will give incentive to small businesses. In carrying out a vigorous programme of cutting public expenditure they will thereby help to cut the inflation rate and the interest rate that seriously affects small businesses.
I know that my right hon. Friend will seek to do all that he can to encourage small businesses. I hope that he will remember that it is no use offering complicated and subtle schemes to such people. The small business man has not the time or the resources to examine the small print. The message from small business men is "Keep it simple".
The most pressing need for small businessmen today is a reduction in the burdens placed upon them, rather than an increase in the amount of cash given to them. If the Government follow these lines they will secure more successful job prospects in Scotland generally, and in East Fife in particular, which are essential to maintain healthy and thriving communities.
I believe that the Government have started reversing the long-term trend of the previous Labour Government, who doubled unemployment in five years. We have seen the beginning of the long haul to recovery in the Scottish economy. I hope that the Government will pursue their efforts with great vigour.

Mr. Gordon Wilson: If brevity is next to godliness, I am afraid that the hon. Member for Fife, East (Mr. Henderson) is destined for hell. However, I must say that we have all learned a lot about East Fife. I particularly welcome his remarks about Dundee being included in the "Golden Triangle" running from Glenrothes to St. Andrews to Dundee.
After listening to some of the speeches tonight one could be excused for not appreciating how bad things are in the Scottish economy. Unemployment is rising, output is stagnant and living standards are about to fall. If that happens the service industries will do badly during the coming year. The figure of 300,000

unemployed, which has been mentioned and which has not been rebutted by the Secretary of State, would be a disaster of the greatest magnitude and it would take the Scottish economy a long time to recover.
In the 10 months that the Government have been in power they have pursued some distinctive if not eccentric economic policies. They have raised the monetary philosophy to the point of idolatry. However, the problems that they saw emerging and for which they have given the monetary prescription have so far shown no signs of being cured. It is hardly surprising to find that in the Cabinet there are murmurings from those people who believe that the solutions that the Government have been pursuing will not do much good to the economy, but will, in fact, harm it. If that is so, the Scottish economy will suffer severely.
If, on the other hand, the solutions are correct and growth begins, we can be sure that Scotland probably will be the last to benefit from such a recovery. In the meantime, the prescription will do untold harm by causing large numbers of job losses, and that is something that no Scottish Member of Parliament wants to see, whatever his political party.
Having listened to the Secretary of State, I am very much afraid that he does not have any specific solutions. I am also afraid that his influence over Scottish matters in the Cabinet seems to be minimal. He had made it his prime resposibility to look after employment and to deal with the crises that occur, yet we always seem to end up dealing with the Under-Secretary of State for Scotland. I wrote a long letter to the Secretary of State in November setting out some suggestions for the Scottish economy, and I got a long reply back from the Under-Secretary which virtually came to nothing when it was analysed and boiled down. In other words, the Government were not prepared to put forward any suggestions or proposals that might help a city such as Dundee, which has considerable problems at present. I hope that when the closing speeches are made the Government will put forward some practical and positive suggestions.
The Secretary of State's primary responsibility should be economic. Regional policy, however useful and valuable, is essentially a policy of applying sticking


plaster to a gaping wound. It is far better to have a healthy economy, which leads to growth. There are many arguments about the way in which that could be achieved, but I am afraid that the Government's policy will not lead to a solution.
Over the past 10 years three Governments have been in power. There was a Conservative Government, who lasted from 1970 until February 1974. Then there was a Labour Government, who lasted almost five years, until May last year, and now we have a Conservative Government again. In that period, under all Governments, we lost 128,000 manufacturing jobs in Scotland. I accept that new jobs are being created in the service sector, but that is not good enough. Although jobs are created in the service sector, we want to maintain in the Scottish economy a strong manufacturing presence, particularly in relation to products that are novel and for which a good market may exist. We cannot live off the service sector entirely. I know that in recent years in all advanced Western countries there has been a move from the manufacturing to the service sector, but in Scotland we have suffered far more than other countries. If the decay in the manufacturing sector continues we will end up without the broad span of industry that is required for the future.
The Scottish people have been cruelly deceived. Promises have been made by both political parties, but at the end of the day jobs have still been lost. It is not surprising, therefore, that there has been emigration. The root of our problems in Scotland is that when economic circumstances are hard people emigrate, and those who emigrate are invariably those with skills. They take their skills with them, and this makes it more difficult to create new industries in Scotland.
The Government must have a much closer look at the training facilities. In the Dundee engineering and training unit that is attached to the engineering industry, the number of boys being recommended or sponsored by the Manpower Services Commission has dropped, and yet there are plenty of boys who would be very willing to take up positions of that kind. It is Government funding that seems to be the problem there. For the last 10 years we have had pretty well a

whole generation of Scots who have been denied the right to secure employment and economic stability.
An article appeared in The Scotsman today pointing out that instead of fighting for their jobs people now seem to rush for their redundancy money. I take to heart that point, which was made some three speeches ago by the hon. Member for Bothwell (Mr. Hamilton). There seems to have been a devastating effect on industrial morale, as people are more interested in the benefits that come with redundancy, knowing full well—this is the tragedy—that there may not be an alternative job for them. These skills are being lost to Scotland, as we have chronic redundancy taking place. As long as that sort of thing goes on in places such as Dundee, it is more difficult to bring about any sort of recovery. That is why I appeal to the Secretary of State.
The problems of the Scottish economy are many. This depressing debate has been brought about by the increase in unemployment.
It is a challenging situation. While countries with natural resources seem to be benefiting most, we in Scotland do not seem to be benefiting from the strategic position that we occupy in geographical terms or from our natural resources in the farming and fishing industries and in energy. I do not intend going off on an oil tack. I wonder sometimes why Scotland, with substantial and varied kinds of energy, should not be able to attract certain kinds of industry. It is a question, in strategic terms, that the Government might wish to examine.
The outlook, therefore, is bleak. It is hardly surprising that Mr. Teddy Taylor should be rushing to join the emigration trail to the South. Perhaps the only industry that seems likely to benefit these days is the carpetbag industry.
I do not wish to exclude the Labour Party from criticism. It has to be placed on record that during Labour's term of office, unemployment doubled and prices doubled. In that period, the rich got richer and the poor got poorer. Hearing the Opposition criticism of the Chancellor of the Exchequer, I could not help recalling—although I am opposed to Government policies—the report of the Royal Commission on the distribution of income and wealth, published recently, which


said that the rich got richer and the poor got poorer in the first two years of the last Labour Government. Between 1974 and 1976 the top 1 per cent. of the United Kingdom population saw their share of the nation's personnal wealth climb, from 22.5 per cent. in 1974 to 24.9 per cent. in 1976.
The report also stated that in the same period those at the bottom end of the scale suffered because their share of personel wealth declined. That is the record of the Labour Government. When the present Secretary of State is attacked by his predecessor, it should be remembered that this year something like £2,090 million, according to Treasury estimates, in oil taxation, oil royalties, petroleum revenue tax and corporation tax, linked with Scotland's major natural asset off our coasts, will be given to the Treasury at a time when the Secretary of State and his colleagues, supported by Conservative Members, intend to cut public expenditure in Scotland.

Mr. William Hamilton (Fife, Central): The hon. Gentleman put them there.

Mr. Wilson: We did not put them there. The hon. Member, who was antagonistic to the Scottish Assembly, has to bear responsibility for that. The record of his Government was a dirty one. The hon. Gentleman should be ashamed of that record. I would hesitate to be a member of a party with a record such as that of the former Labour Government. The hon. Gentleman and his colleagues consented to Scotland's oil resources being swallowed up by the Treasury instead of going into a special development fund, as the right hon. Member for Bristol, South-East (Mr. Benn), I believe, suggested at one stage.
If the Opposition fail to apply pressure for a share of oil revenues to come to Scotland they are letting down their constituents and condemning those constituencies to poorer educational facilities and the sacking of teachers. They are scared to claim Scotland's natural resources for the benefit of their own people. I would be ashamed to be a member of a political party that behaved in that way.
If any further criticism is required of the Labour Party, it can be found in an article by Professor Donald Mackay, published on 18 January 1979. It showed—

and it has not been denied—that regional spending in Scotland had been reduced by 40 per cent., mainly through the sudden elimination of the regional employment premium. For a party that has always claimed to be in favour of investing State funds in the development of industry, that is nothing short of scandalous.
Our problems in Scotland are deep, hut, fundamentally, Scotland is a rich country. We must make sure that its resources are used for the benefit of its people and that its training facilities and apprenticeship systems are reviewed and renewed in order to get fresh skills on to the labour market. We have a tremendous job ahead.
I have no doubt that Scotland, in terms of people and assets, has the capability to forge a new life for itself in the 1980s and the 1990s. I am certain, however, that, following the experience of the last 10 years and longer, unless we achieve self-government Scotland will remain bottom of the industrial league.

Mr. Ian Lang: It is a great pleasure to follow the Scottish National party spokesman. I say that, like many of my hon. Friends, with strong personal feelings, even though, because of the support that the SNP gave to the Labour party, we had to wait almost two years longer than we needed to have done to enjoy that privilege.
I find myself still reeling with astonishment at the sour and intemperate tone of the remarks of the right hon. Member for Glasgow, Craigton (Mr. Millan). If the right hon. Gentleman is at all economically literate—I give him credit by believing that he is—he must surely know that cause and effect in the management of national economies are almost always separated by many months. Thus, his strictures inescapably fall on his own conduct of Scottish affairs and not on those of my right hon. Friend.
Last week, the right hon. Member for Craigton said:
If there is to be misery, it ought to be shared all round."—[Official Report, 1st Scottish Standing Committee, 12 February 1980, c. 228.]
thus encapsulating Socialist philosophy at the one point where it actually conjoins with the Labour Government's record of


achievement over the last five years. Perhaps even that is to do the Opposition more than justice. The late and sadly lamented Patrick Hutber put the matter more accurately when he described Socialist equality as:
that euphoric state where everyone has less than everyone else.
When it comes to spreading misery there are few to match the right hon. Member for Craigton, but his hon. Friends have echoed their miserable master's voice like a veritable Greek chorus of woe and incomprehension; and equality of misery was one thing that the right hon. Gentleman failed to achieve. Under Labour, we were all miserable but some were more miserable than others.
One of the miserable inequalities achieved by the previous Labour Government was the lamentable and inexorable trend whereby while productive tax-generating jobs in manufacturing industry vanished by the thousand, unproductive, bureaucratic, administrative jobs in the public sector, which consumed taxpayers' funds, proliferated. Fifty years ago only 7 per cent. of the work force was engaged in the public sector. Now that figure is nearer 30 per cent. In the past two years of supposed restraint by the previous Labour Government, the number of local government employees in Scotland rose from 245,000 to nearly 260,000 at a time when unemployment overall was scaling new heights.
I had occasion not long ago to make a telephone call to Strathclyde regional council. Finding the number in the telephone directory was the beginning of my problems. I found in the Glasgow directory alone for 1977 no fewer than 850 different lines and numbers connecting to that Council. One shudders to think what is the total number of lines now to that regional authority for the region as a whole.

Mr. Tam Dalyell: The hon. Gentleman is dealing with Civil Service jobs. Does he favour bringing Civil Service jobs to Scotland? If he goes to help the Conservative candidate in Southend, what will he say there about the dispersal of jobs to Scotland?

Mr. Lang: I favour the dispersal of Civil Service jobs to Scotland. I am en-

couraged by the robust championship shown by my right hon. Friend the Sectary of State. The hon. Gentleman's question would be better directed to the leader of the Liberal Party, who should be asked whether he associates himself with the comments of his hon. Friend the member for Liverpool, Edge Hill (Mr. Alton) as reported in The Scotsman today.
The cost to the economy of increased local authority expenditure is staggering and overwhelming. When one looks at the figures for Strathclyde—

Mr. John Home Robertson: rose—

Mr. Lang: In the interests of time, I cannot give way again. It is hardly surprising to learn that the figure of £444 million expenditure by Strathclyde regional council in the first year after reorganisation rose to £793 million last year.

Mr. Robertson: On that point—

Mr. Lang: My hon. Friend the member for Edinburgh, South (Mr. Ancram) has demonstrated the horrific expansion that has taken place in Lothian region, with the correspondingly frighteningly high anticipated increase in rates. Nothing could be more damaging to the recovery of the Scottish economy than the vicious and mindless rate increases being planned by Labour-controlled local authorities, literally driving businesses to the wall and employees on to the dole queue.

Mr. Robertson: Will the hon. Gentleman give way?

Mr. Lang: If Labour Members spent more time digesting my remarks and less time anticipating them they would find their intellects much better nourished.
My local regional council, Dumfries and Galloway, an excellent and efficient local authority, employs 34 fewer employees than it did at the time of regionalisation five years ago. But for the compulsory transfer of 46 staff by central Government on regionalisation, the total saving would have been 80. The costs of administration and management per head are well below the national average. Indeed, Dumfries and Galloway regional council has the lowest expenditure per


head for 1979–80 of all the regional and island councils.
By adjusting the ratio of the needs and resources elements in the rate support grant, my right hon. Friend the Secretary of State has begun to do justice to such efficient authorities and I urge him to maintain his efforts in that direction.
I should like to draw attention to some rural problems that are no less acute for being less graphically visible than urban problems. Six jobs lost in a small community are as disastrous for that community and the surrounding area as 600 jobs lost in a larger community.
As my hon. Friend the Member for Moray and Nairn (Mr. Pollock) said so effectively, the whole rural way of life is in jeopardy. We still find there the self-reliance and sense of values to which the Conservative Party is attuned and we must not let them be undermined or lost. My right hon. Friend the Secretary of State has paid considerable tribute to the importance of small businesses and the farming communities in rural areas, so I shall not dwell on that.

Mr. George Foulkes: While the hon. Gentleman is on the subject of farming will he indicate how the farming community is managing with the 22½ per cent. interest rates that it is having to pay, how the fishermen in the South-West of Scotland are looking forward to their boa's being laid up for the next three weeks and whether the Secretary of State has given him any hope with regard to the A75? All those problems affect the hon. Gentleman's constituency.

Mr. Lang: My first instincts were right. I should not have given way to the hon. Gentleman. It is obvious that he was not listening to my speech, for he has not raised points relevant to it.
I was referring to the need to revive certain industries related to agriculture. I draw particular attention to the dry stone walling industry which is reviving in my constituency. It 'takes about one ton of stones to build one yard of dry stone walling, or dry stone dyking as it is sometimes called. When one has to strip down and rebuild a wall it involves moving two tons of stones per yard.
The problem is that young apprentices coming into the industry cannot build sufficient lengths of wall to earn a day's

wage, and the self-employed dykers cannot afford to take on apprentices unless they have outside help. Because the industry is not connected with the production of food, no grant is available from the agriculture training board. Nor is finance available from the SDA, which is mainly concerned with manufacturing related industries. The industry, being composed of self-employed individuals, clearly cannot fund its own training scheme.
I urge Ministers to look at the problems of the industry and others like it to see whether a more imaginative and flexible approach can be found, through the various organs of Government, to help it.
I should like to mention finally tourism, which is an increasingly important industry throughout Scotland. My own constituency is much involved and I think that we have the only regional tourist association in Scotland.
Foreign tourists account for only about 8 per cent. of visitors to Scotland, but for about 32 per cent. of expenditure. Their importance on the tourist scene can be readily appreciated.
The personal assistant of the chief executive of the Dumfries and Galloway regional council visited America recently and was astonished to find how little was known about Scotland and how little information was available on Scottish tourism. Indeed, in the far West they thought that Galloway was in Ireland.
I am not criticising the British Tourist Authority, which does a fine job, but its duty is to attract visitors to Britain and it is hardly surprising that it tends to concentrate on attracting them to London where larger amounts of money can be spent and to which they can be more easily attracted.
The Scottish Tourist Board is not allowed directly to advertise abroad. I urge Ministers to reconsider that restriction, because it is not satisfactory that in order to be allowed foreign advertising the regions must get together to advertise collectively or join the Scottish Tourist Board in advertising abroad. The board should have its own powers.
I trust that the Government will pay due attention to the important rural


economy in Scotland and ensure that when the recovery comes our rural areas, which play such an important part in Scottish life, are able to share in that recovery.

Mr. Martin J. O'Neill: I should like to start with an apology, because in Committee I have been castigating the hon. Member for Fife, East (Mr. Henderson) for not speaking. I realise now that he was saving himself for the speech that he made earlier in this debate. If he is the face of modern capitalism I can see why we need to discuss the problems of the Scottish economy.
I wish to concentrate on the problem of unemployment. I hope that I shall be forgiven for not entering the pantomime exchanges that usually occur in such debates, with each side saying that its figures are better than those of the other side and when we are reduced to "Oh, yes they are" and "Oh, no they are not". I intend to look at the prospects for the Scottish economy in terms of unemployment.
I should like to draw the attention of the House to the report that appeared in the Fraser of Allander Institute bulletin last year which projected that there would be horrendous unemployment in Scotland by 1984. It predicted thousands more redundancies and many more in the dole queue. We have to look at what the Government intend to do about that and what Conservative-associated organisations think of the efforts of the Government to attack unemployment in Scotland effectively.
The present unemployment level of 176,000, seasonally adjusted from 203,000, is one which no one can accept. We are told that the number will start to fall in the next few months as the Government's policies begin to bear fruit, though, having listened to the Secretary of State's asinine platitudes, I can see nothing in the Government's policies to suggest that there will be any improvement.
The Fraser of Allander Institute started out with fairly conservative assumptions. For example, it assumed that it was likely that about 17,000 people a year would emigrate during the lifetime

of the present Government. That is about 7,000 more than the Registrar-General's estimate, but the institute points out that it is likely that emigration will increase as the depression in the economy continues.
The report projects figures as far ahead as 1993. Over a five-year period it should be more accurate than some of the past projections.
The report shows that the Treasury forecasts that manufacturing industry will fall and that it is likely that there will be little job expansion in Scotland. It also argues that in the 1980s various changes in the birth rate will have resulted in an increase in the number of people looking for work, though it will start to level off by the latter part of the decade.
Its conclusions were clear. It said that between 1979 and 1984 registered unemployment in Scotland—unless action was taken—would rise by 50 per cent. It also said that the rise would be more marked among women than among men but that employment for women would be more steady. In manufacturing industry, where there would be a decline, employment for men would decrease.
The report made the point that, on the number of registered unemployed, the temporarily unemployed and the sick, some 358,000 people would be out of work in Scotland by 1984. These figures are depressing and worrying. However, a projection by the Cambridge Growth Project—which forecasts that by the year 2000 there could be 5,500,000 unemployed in the United Kingdom—would suggest that in Scotland something like 750,000 people would be out of work by the turn of the century.
While the long-term forecasts may be doubtful, against the background of potential unemployment of the order I have mentioned for Scotland in the mid-eighties we must listen to what the forecasters are saying. The CBI forecast in January pinpointed general uncertainties and said that those uncertainties were consistent with expectations of weaker demand and output, higher interest rates, continuing inflation and a strong exchange rate. That statement is tucked away in the CBI report, which has not received nearly so much attention as the noises made by the CBI last winter when the lorry drivers were on strike and when


John Methven and Alan Devereaux said that the British economy was on the point of collapse.
We hear sometimes that trade unionists are not properly represented by their officials. If I were a businessman and people like Methven and Devereaux represented me, I would be most reluctant to pay my dues. They are failing to back the interests of British manufacturers.

Mr. Allan Stewart: The hon. Member seems to be making a personal attack on me.

Mr. O'Neill: I am willing to make a personal attack on the hon. Member for Renfrewshire, East (Mr. Stewart) but I think it would be inappropriate in this place. Last winter CBI officials were less moderate than they are now. A slavish defence of the Conservative Government has been put up by the CBI this year, but it has not defended the interests of British business men and has kept quiet about the problems facing the British economy. The CBI industrial forecasts for Scotland have been increasingly depressing since the hon. Member entered the House. Since July 1979 the level of disillusionment in business has been at its greatest since October 1975. That probably coincides with the arrival of the hon. Member back in Scotland. The Allander report in in January this year.

Mr. Stewart: Surely the hon. Member for Clackmannan and East Stirlingshire (Mr. O'Neill) agrees that according to the most recent survey the key capital capacity utilisation figure has improved. Most economic commentators have always regarded that figure as one of the most important in the whole survey.

Mr. O'Neill: Other commentators on the British economy have been unanimously depressed by the figures. There is no way that Tory Members will convince the Opposition that British industry is on the verge of a boom and is about to expand.
We have had a Cook's tour through the constituencies of Scotland during the debate and I must plead guilty to going a little way along that road myself. In my own area we have seen the direct effects of Government policies recently.
I draw attention to the Glynwed Company which operates in Falkirk. Glynwed is a holding company that has taken over many firms in Britain, some of them local institutions like those in Falkirk that produce Raeburn and Aga cookers. Those cookers are supplied to institutional catering establishments. When the firms were laying off 400 workers management was asked the reason. It was said that the reason was a fall in demand for their product as a result of cuts in public expenditure. Perhaps it is unfortunate that it did not foresee that situation when it spent £10,000 in support of the Tory general election campaign.
There is almost total indifference on the part of the Government to the plight of the foundry industry in central Scotland. It took the ingenuity and the drive of the central region authorities to hold a symposium last week at which the problems of the foundry industry were discussed.
Direct Government action could be taken and in a short time 2,000 to 3,000 jobs could be created in the whisky industry. If the Government were prepared to follow up the action of the previous Administration and do something positive about stopping the bulk of whisky exports there could be a massive improvement in the glass and bottling industry in the area. The right hon. Member for the Western Isles (Mr. Stewart) made the point that the previous Government did not arrest those exports. But the previous Government did work towards compelling the EEC to ensure that the bulk of whisky exports were reduced. This Government have taken no advantage of that effort, and the minimal amount of work required to create 2,000 jobs in central Scotland has been left undone because of the indifference or the indolence of Ministers at the Scottish Office.
The Secretary of State along with other hon. Members spent a morning at the Scottish Knitwear Association, at which a very' strong case was made not for the protection of the industry but for the positive assistance that it needs. Since that meeting we have heard nothing from the Scottish Office, from the Department of Industry or from the Department of Trade about giving positive assistance to the Scottish knitwear industry. In that industry more than 1,000 jobs have been lost in the last year.
We would like the Under-Secretary of State for Scotland, the hon. Member for Edinburgh, North (Mr. Fletcher) when he has finished answering the questions of the hon. Member for Fife, East to tell us that in the near future we will get a reduction in interest rates to allow businesses to borrow and so expand. We hope he will tell us that we will get investment in the mining industry which would help it to mine the tremendous coal reserves in Scotland with comparative ease and which would transform the economy of certain parts of Ayrshire and Central Scotland.
We would like to see commitment to planned school training and a commitment to ensure that the Manpower Services Commission gets the support that it deserves. We would like to see the SDA restored to the role of industrial banker rather than that of industrial landlord to which it has been relegated. To get the jobs that will prevent unemployment from reaching the figure of 250,000 to 300,000—as quoted by The Times—we will need Government intervention and investment.
We must ensure that local government services are not cut. A few months ago some of us had the privilege of listening to a senior civil servant in the Scottish Office who said that there was no correlation between extravagance and high expenditure in local authorities. The hon. Member for Edinburgh, South (Mr. Ancram) should understand that the allegations about the profligacy of local authorities such as Lothian are total nonsense. Such bodies provide services which the Government are unwilling to finance.
We have been told of complaints by local business men. We did not hear complaints last year when local business men received big tax handouts as a result of the Budget. We are interested to know whether the rate increases that firms must now pay are in excess of the tax handouts by the Chancellor.
We want the Government to be removed, but that is a forlorn hope. In the short term we must have action to ensure that unemployment in Scotland does not become worse. So far there are no suggestions that will improve the situation. It will not improve until the

Secretary of State resigns and we have a chance for a fresh start.

Mr. Canavan: On a point of order Mr. Deputy Speaker. Since the debate is about the Scottish economy and there are twice as many Labour Members representing Scottish constituencies as there are Conservative Members, is it possible for you to bear that ratio in mind when calling hon. Members to speak?

Mr. Deputy Speaker (Mr. Bernard Weatherill): That can be borne in mind, but it is not the normal practice.

Mr. John MacKay: I suggest that the hon. Member for West Stirlingshire (Mr. Canavan) sits and listens, as I had to when the Education (No. 2) Bill was in Committee. If he tempts me too much I may try to get my own back for the number of minutes that I had to listen to him.
The hon. Member for Clackmannan and East Stirlingshire (Mr. O'Neill) quoted oft from the Fraser of Allander Institute reports. I do not wish to go far along that road with him, because I treat that institute in the same way as I treat The Scotsman—a side office of the SNP.

Mr. Donald Stewart: Is the hon. Member saying that these reports are not worth the paper on which they are written, although they are written by reputable academics?

Mr. MacKay: I did not say that. I said that I would not go too far with them because some of the reports are written by people who have close links with the SNP.
In April 1979 the president of the Fraser of Allander Institute described the Scottish economy as
a sick man on drugs'".
He suggested that the cure was to reduce its dependence on those drugs gradually. That gradualistic approach towards the withdrawal of Government help to all and sundry is adopted by my right hon. Friends in the Government.
The report said that there was little doubt that the Scottish economy was weaker in April 1979 than it had been in


1974. Before Opposition Members complain about the current levels of unemployment they should examine the figures and percentages. When the Labour Party took office, unemployment in Scotland was 95,600. By January 1978 it had risen to 203,000. That was an increase of 113 per cent. The hon. Member for Clackmannan and East Stirlingshire hopes that unemployment will not rise by 50 per cent. in the next five years. So do I. We hope also that we can do a great deal better than the Labour Government, which presided over an enormous unemployment increase. Scottish unemployment would be 374,000 if we did as well—or as badly—as they did when they were in office.

Mr. O'Neill: How long do we have to wait for the economic miracle?

Mr. MacKay: After five years of Labour Government we cannot expect economic miracles overnight. The hon. Member for Clackmannan and East Stirlingshire should know that, since he is an economist. It will be a long haul because the patient is very sick and will not recover overnight.
The Fraser of Allander Institute drew attention this year to the many disparate groups involved in industrial promotion in Scotland. I recommend to the Government a document issued by the Institute for the Study of Sparsely Populated Areas called "Concurrent Functions of Public Authorities in the Highland Region". The Highlands and Islands Development Board, the SDA, and the regional and local authorities compete to do the same job. We should simplify the system so that one person goes out to catch the industrialist with his rod and line, rather than have a whole batch of people who muddy the water.
All is not bleak. All is not black, although I am sure that the Opposition would like it to be so. The right hon. Member for Glasgow, Craigton (Mr. Millan) complained that South Wales was to receive £48 million extra. I am delighted that Scotland does not have the great problems experienced by Wales. I am glad that I can sit back and see the money going to South Wales. I should have expected Socialists to be prepared to see one part of our country which is in great need receiving particular help. Opposition Members seem to say that

they wish Scotland was as badly off as South Wales so that it could receive the money instead.
In the last few months Chrysler and Talbot have proved that an industry with a bad reputation can, by its own efforts, improve its image, and after this morning's splendid news I hope that BL will be able to do the same. It is a tragedy that the steel industry seems determined to cut its own throat. We experienced the same thing last year at Hunterston. Much public money was invested, and yet it was unused for months on end.

Mr. Foulkes: Will the hon. Member give way?

Mr. MacKay: I shall not give way.
When I was travelling to London on the plane, I read the Glasgow Herald. It was worth reading, because for a change I read good news. It was headlined:
Double shot in the arm for industry".
and said:
The gloom surrounding Scotland's industrial future lightened yesterday with the announcement of a double helping of good news. John Brown Engineering Gas Turbines, Clydebank announced a £7.4 million contract as Rolls-Royce outlined a £50,000 campaign aimed at bringing another 300 skilled workers to the Scottish factories by the end of the year, making about 500 in two years.

Mr. Norman Hogg: Will the hon. Gentleman give way?

Mr. Foulkes: Will the hon. Gentleman give way?

Mr. MacKay: I shall give way in a moment to the hon. Member for Dunbartonshire, East (Mr. Hogg). It does not do anybody any good to continue to harp on the bad news and never mention the good.

Mr. Hogg: Is it not the case that the good news refers to two State enterprises? That proves the case for State enterprises.

Mr. MacKay: That is exactly my point. When there is good news, all that the Opposition can say is that it concerns a State enterprise. I suppose that I am expected to say that it is bad news, and that it is good news only if it concerns private enterprise. That proves that Opposition Members are more concerned


with scoring political hits than with looking after the economy of Scotland.
I shall try not to go through the highways and byways of my constituency, but I wish to mention the economy of the Highlands and Islands. I reiterate the remarks of my right hon. Friend the Secretary of State that the Government have increased the amount of money available to the Highlands and Islands Development Board to spend in the Highlands area this year.
We welcome the announcement that the Scottish Office is to continue to give a grant to the Civil Aviation Authority to allow it to continue operating the airports. Indeed, the grant is to be increased by £1 million. I hope that those who did not believe the statement by my hon. Friend the Under-Secretary on 18 December, when he said categorically that the Government would not allow the Civil Aviation Authority to withdraw from the airports, will have the good grace to thank him for his announcement this week.

Mr. Foulkes: rose—

Mr. MacKay: I shall not give way.

Mr. Foulkes: I am being discriminated against.

Mr. MacKay: I am indeed discriminating against the hon. Gentleman. He has only himself to blame.
The public and private enterprises in the timber industry form an important partnership to produce timber. We are delighted with two pieces of good news that we have heard recently. One concerns Caberboard at Cowie in Stirlingshire, and the other at Fort William, where Wiggins Teape and Consolidated Bathurst are going into partnership to open the pulp mill for new production. They will use many of the trees that we are growing at the expense of both taxpayers' money and private capital. Unfortunately, we shall always be dependent upon the import of trees and tree products, but we can, by our own efforts, help to lessen that dependence. I welcome the efforts of the Scottish Office and my hon. Friend the Under-Secretary. I thank him for his efforts to help those at Fort William to find alternative production for that factory.
I do not wish to divert my remarks to agriculture, but I must say that my farmers, though they are not exactly pleased with the present position, are a good deal more pleased than they were a year ago after five years of Labour Government. I hope that my hon. Friend the Under-Secretary will kindly tell his right hon. and learned Friend the Chancellor of the Exchequer that family farmers in Scotland wish for some action on capital transfer tax so that their family businesses can continue on the basis on which agriculture has to depend, namely, one generation after another.
I am sorry that my right hon. Friend the Secretary of State is not in the Chamber, because I know that he and I, together with the hon. Member for South Ayrshire (Mr. Foulkes), share a common interest in the Clyde fishing industry. Much work has been carried out on conservation in the Clyde area. The fishermen have looked after their fishing very well indeed. I wish to underline that we must not allow fishermen—not only from Europe but from other parts of Britain—to interfere with the tightly conserved fishing that has been built up on the Clyde estuary.
As an aside, I wish to emphasise the need for a fish processing industry and for the continuation of a product. Fish farming could give the fish processing industry an all-the-year-round trade, in addition to the fish that are caught in the wild. The Givernment must consider ways in which to help that important industry, especially with legislation. Fish farmers produce something that is different from that caught in the wild. They are often restricted by rules and regulations which were designed for fish caught in the wild and not for fish that are farmed.
An important industry in Scotland, especially in the Highlands, is tourism. I know that some hon. Members are not keen on tourism, or service industries in general. There are Left-wing economists, such as Professor Kaldor, who appear to think that service industries are second-rate. The father of economists—I do not know whether he would be proud to be called that—Mr. Adam Smith, castigated services such as the tourist industry by saying that they were services
which perish generally in the very instant of their performance, and do not fix or realise themselves in any vendable commodity".


I hope that my right hon. and hon. Friends take a more sensible and realistic view of the importance of service industries, especially tourism. In Scotland in 1978, £523 million was spent in the tourist industry, and 13·2 million tourists holidayed in Scotland. My constituency accounts for 10 per cent. of the figures. Over the whole of Scotland tourism accounts for 100,000 jobs.
There are problems in the tourist industry, which I have mentioned already in relation to the report on duplicated functions, which the Government ought to consider. There are too many fingers in the tourist pie. Regional and district councils all want their empires. The HIDB has a good track record, and the rest of Scotland should note the way in which it has encouraged those in the industry to establish a tourist network.
This month the chairman of the Scottish Tourist Board, Mr. Robert MacLellan retires. This is a good opportunity for the Government to appoint a chairman who will build on the work that has been done in the past, and who will view the tourist industry through new eyes at an important time in its history.
When the Government appoint the new chairman, they should consider also the whole question of the relationship between the Scottish Tourist Board, the English Tourist Board, the Wales Tourist Board and the British Tourist Authority. There is no doubt that they could co-operate under the umbrella of the BTA to advertise the tourist wares of Britain, to the benefit of all parts of the country.
It should be remembered that the tourist industry plays an important part in the rural areas, where, without tourism, there would be little industry. Those who knock tourism should remember that it is important. It is important for those who work in the industrial and urban areas of the country to be able to spend some parts of the year in the beautiful countryside, where they can enjoy relaxation and pleasures and enjoy living with country people. It is important that the rural economy is maintained in a good condition so that the tourists from the cities can visit a living countryside, rather than a dead one.

Mr. William McKelvey: I am glad to have the opportunity to

speak in the debate. Like the hon. Member for Argyll (Mr. MacKay) I shall not go down the highways and byways of my constituency because we are discussing the Scottish economy.
I hope that I shall be forgiven if I mention that Kilmarnock, being in the so-called triangle of disaster, has had several heavy dunts recently, the most recent of which has been the complete disappearance of the Massey-Ferguson work force. The rundown of the work force has started, and 1,500 jobs will be lost within the next few months. That will put the Kilmarnock district figure up to 50 per cent. That is not only undesirably high, but absolutely intolerable.
I want to refer later to the effects of the multinationals—Massey-Ferguson, for example. I draw attention to the Scottish Economic Bulletin of August 1979 in which the Government's policy of propaganda was stated as follows:
A marked switch in emphasis from taxes on income to taxes on spending should provide a substantial improvement in incentives to enterprise, innovation and efficient working.
I should like to know when that is to begin. We have been waiting for some time for these entrepreneurs to appear in Scotland. They are not appearing in the Kilmarnock district, although one type of entrepreneur has appeared. I should like to refer to an advertisement in the Kilmarnock Standard last week, just prior to 1,500 starting to leave their place of employment. Some had worked at Massey-Ferguson for 30 years. It is
Alex Young's fantastically low-priced redundancy money special".
He is advertising motor cars. The advertisement suggests that a man should place a deposit now on the car of his choice and pay the rest when his redundancy money comes to him. This man is certainly innovative. I suppose that we could classify him as an entrepreneur. I should describe him not as galvanised or electrified, but as a brass-necked "redundavulture". We have such vultures hanging over Kilmarnock waiting to grab people's money. But they are very short-sighted. That redundancy money and Kilmarnock's economy will not last long. Indeed, before very long this particular firm may find that people in Kilmarnock have no further money to buy motor cars and accessories


and Alex Young himself will be facing redundancy. It would be bad enough if he were advertising British cars, but I notice Japanese and other foreign cars in the advertisement. People are being encouraged to buy Japanese cars with British redundancy money and to put British Leyland workers out of work. So the circle goes on.
Scotland has always had a difficult unemployment situation. However, it has been sporadic, because there have been periods of recovery. This time the opposite is the case. We have a chronic, bitter joblessness which appears to have no limit. I think it was the chairman of the STUC who said "When in the name of God is it going to end?", because redundancy notices were appearing week after week.
Redundancies no longer make headline news. Redundancies of 1,500 are commonplace in Scotland and barely take up a two-inch paragraph in local newspapers. It has to be something sensational before it hits the headlines. The sacking of a convener or a commotion on a picket line apparently creates more interest.
A jobless figure of 200,000 has been mentioned. The latest figures, although not available for this month, will indicate well over 200,000 in Scotland. If hon. Members can visualise Hampden Park almost at capacity, the unemployment figure is twice that. For 1981, which is but a year away, the forecasts are in the region of 300,000. That will be a catastrophic waste of manpower.
I want to dwell quickly on the multinationals. They have not received much attention so far in the debate. A great deal of the Scottish economy now depends upon the whims of the multinationals. I have discussed with the Secretary of State and other Ministers the power that the multinationals wield over us. We have seen examples of it in the Ayrshire district. We have massive redundancies at Massey-Ferguson, Skefco and Monsanto. All those companies argued at the time that they were concerned not so much with the Scottish economy as the British economy.
We now find that Massey-Ferguson, the only producer of big combine harvesters in this country, has transferred to the French market. The latest word on the

grapevine is that 200 workers are to be made redundant in Marquette and a further 400 in Beauvais in France. Massey-Ferguson, having transferred the work, is now starting to lay off in that area.
The capitalist crises of the Western World first affect Scotland, then British industry, and finally European industry. The multinationals must bear the responsibility because of the way that they have operated in these countries. They build up the work forces and then leave with no social responsibility.
The tragedy is that we welcome the multinationals. We must, because we are desperate for entrepreneurs. Our entrepreneurs are not putting money into Scotland—certainly not in the Kilmarnock area. I know business men in Kilmarnock who have invested in South Africa and Taiwan. The industries on which Scotland depends are being starved of the finance that they desperately require. It goes to Taiwan. People in the knitwear industry last week told Members of Parliament that a sweater bearing a Shetland wool label was arriving on the dockside from Taiwan priced at 95p. Scotland's knitwear industry cannot compete with such products. Until we restrict these imports and ensure that the money goes into the Scottish economy, not abroad, we shall not prosper.
We must bring about a change in the Scottish economy from the Friedmanite monetarist policies. It might be argued that the Tory Government have a mandate to impose such policies on the people of England, but they should not be imposed upon the people of Scotland, because they did not vote Tory. They voted Labour. Therefore, they should be given special consideration. It is not that I would keep that special consideration for Scotland. Being a good Socialist, I should like the same to apply to England. Nevertheless, as the English voted for a Tory Government, they should suffer the consequences. However, some credence should be given to the way that the Scottish electorate voted.

Mr. Allan Stewart: Therefore, the hon. Gentleman will presumably agree that the previous Labour Government—indeed, every Labour Government except possibly one in the last generation—had no mandate to rule England.

Mr. McKelvey: I thought that this was a debate on the Scottish economy. I was prepared to extend it to England. Of course, if that is the situation, we could develop the argument region by region. If so, the hon. Gentleman must agree that the northern parts of England would have to be lumped into Scotland. The North of England has loyally, consistently and persistently voted Labour. Therefore, what the hon. Gentleman said would be correct for the South of England, and it deserves what it gets. But, even those areas are now beginning to squeal. The point that I was trying to make was that we are on the extremity and that the problems of the Scottish economy have magnified. We are being centralised now not with the Midlands, but with the European concept.
If anyone can say that our arguments—I am anti-Common Market—have not borne fruit, I should like to meet him. In Scotland these days one can never find anyone who voted Tory, let alone anyone who voted for British membership of the Common Market.
The problem in introducing this English-type Tory philosophy in Scotland is that we are given the same type of propaganda: we should all be one big happy family. That is the Tory machine propaganda. Members of the family must work together, they must work in unison and they must all tighten their belts. We are told that there can be no increase in public expenditure and that the purse strings must be tightened. If we were the Waltons, we might work in that fashion. But we do not work in that kind of fashion as a family. When workers are being made redundant, and when they are being told to tighten their belts, those who have money are investing it for themselves, not for the rest of the family.
The family image in Scotland has evaporated almost overnight. It exists only amongst those in Scotland who were deluded into voting Tory, on the false promise that there would be a change in taxation which would solve all their economic ills. That will not solve our economic ills, either in Scotland or in Britain. There is only one way in which to solve those economic ills. I ask all voters in Scotland, particularly those who voted Labour, to write to all their counterparts in England on the next possible occasion, and try to get support for the

Labour Party in the next election. That would be the first step in introducing sensible Socialist progressive policies to end our economic ills.
Secondly, to free us from Friedmanite monetarist policies, we should have a planned strategy on multinational companies. We realise that there will be difficulties, but we have lost thousands of jobs to Southern Ireland because that country was able to offer better inducements—in many cases to the tune of £4,000 per job. There should be an immediate programme on selective import controls. If there is not such a programme, there is no hope for either the British or the Scottish economy.
Thirdly, there should be a massive increase in public expenditure, and a reversal of the Tory cuts. That is the only way in which to stabilise the economy and to halt unemployment. If the Tories do not halt unemployment, I have no doubt as to what will happen at the next General Election.

Mr. Allan Stewart: I shall not comment at any length on the speech of the hon. Member for Kilmarnock (Mr. McKelvey), except to say that I expect that a certain section of his speech will be quoted again and again by whoever is adopted as the SNP candidate for Kilmarnock.
I should like to start by saying what I intended to say in an intervention during the speech of the right hon. Member for Glasgow, Craigton (Mr. Millan), when he attacked the Government on the dispersal of Civil Service jobs. He has the most incredible brass neck to attack the Government on that issue. His Government were in power for five years, and they did not disperse a single job to Scotland. All that Scotland got from his Government were five years of hot air on the issue—not a single job.
I should like to comment on the way in which the right hon. Gentleman reacted to the intervention of my hon. Friend the Member for Galloway (Mr. Lang) about the termination of the regional employment premium. He seemed to be telling the House that the ending of REP was a great personal victory. We look forward to seeing a chapter in his memoirs—"My Cabinet Victory; the end of REP". That was a


deplorable method of changing a regional policy.
I am not arguing whether REP should have been phased out, but it was not phased out. It was cut, in effect, retrospectively, without consultation and without warning. The right hon. Gentleman took £80 million out of Scottish industry overnight. That is the difference between the changes in policy of the present Government and the previous Government. I welcome the changes of the present Government and the way in which they are being phased over a sufficiently long period to allow industrialists to react and to adjust.
As for the references of the right hon. Member for Craigton to the industrial policies for Scotland and his constant reference to the need to beef up the SDA, we know what the Socialist plan for Scotland is. Scotland needs more Scofiscos—that is what it amounts to.
I welcome the changes that have been made to the guidelines of the SDA. If any company in the private sector had the record that the SDA has had with its subsidiaries—every one of which made a loss last year—the shareholders would be asking many questions about that company.
More generally, I should like to pick up the points made by my hon. Friend the Member for Argyll (Mr. MacKay).

Mr. Ernie Ross: Before the hon. Gentleman leaves that point, will he comment on the financial management of the Chrysler corporation before it was tossed in with Britain?

Mr. Stewart: I am not sure what the relevance of that point is. The Chrysler Corporation's jobs are still there and my hon. Friend the Member for Argyll has referred to the efforts that are being made in Linwood to recover from that difficult position. I pay tribute, as he paid tribute, to both the management and the employees at Linwood.

Mr. Harry Ewing: rose—

Mr. Stewart: I shall not give way to the hon. Gentleman.

Mr. Ewing: rose—

Mr. Deputy Speaker (Mr. Richard Crawshaw): Order. The hon. Gentleman does not appear to be giving way and the hon. Member for Stirling, Falkirk and Grangemouth (Mr. Ewing) must resume his seat.

Mr. Ewing: rose—

Mr. Stewart: I shall not give way to the hon. Gentleman. I have already given way to the hon. Member for Dundee, West (Mr. Ross) and there are many other hon. Members trying to speak in the debate.
My hon. Friend the Member for Argyll and the hon. Member for Kilmarnock referred to criticisms that have been made of the institutional structure in Scotland for attracting inward investment. That problem will be examined by the Select Committee and it would be out of order for me to refer to it. I hope that the Government will not make any decisions ahead of the report of the Select Committee. However, I am concerned to hear reports that the SDA will be opening offices here, there and everywhere. The Scottish Council did a tremendous job in attracting inward investment into Scotland without any overseas offices.
The question of the microelectronics industry is obviously one of considerable importance for Scotland. Today in Scotland there was an important conference on the industry and its applications. That conference was organised by the Scottish TUC, the CBI, SCOTBEC and SCOTEC. I believe that Opposition Members should pay more tribute to what is being done by both sides of industry in Scotland to try to meet Scotland's problems.
I should like to ask my hon. Friend the Under-Secretary some questions about the urban development corporations and the enterprise zones. I hope that he will be able to tell us where the Government stand on those matters, which have received an immense amount of publicity. In East Kilbride there is an excellent team on the urban development corporation, which has done a tremendous job. As a result of East Kilbride's reaching its target, that sort of effort will be available elsewhere. Many people of all political persuasions believe that my right hon. and learned Friend the Chancellor of the Exchequer put forward an excellent proposal when he made his speech in Glasgow about enterprise zones. Indeed, we


have a temporary enterprise zone in Glasgow every weekend. It is called "The Barrows". If any hon. Member thinks that there is no enterprise left in Glasgow, he should get up early one Sunday morning and visit the Barrows. There is plenty of enterprise there. As I have said before, inside every moonlighter there is a small firm waiting to break out. There is plenty of enterprise in Glasgow and in the West of Scotland. The people need incentives in the form of lower taxation, less regulation and less restrictive planning procedure throughout Scotland. If we go down that path, jobs will come. No one pretends that that will happen overnight. However, if we free enterprise, provide incentives and reduce regulations, those jobs will come.

Mr. Norman Hogg: When I began to prepare my remarks, I was filled with gloom. Every forecast and every economic projection for the Scottish economy in the near future and in the medium term, was gloomy. There seems to be little to be cheery about. I gained little encouragement from looking at any of the figures or projections. Indeed, all the economic forecasts agreed that there would be a recession. They all said that output would fall. They all thought that unemployment would rise and that living standards would at best stagnate. They all forecast that inflation would continue to rise for several months. The Treasury says that there will be a 2 per cent. contraction in the economy in 1980.
Against that background we can only conclude that the situation in Scotland is extremely worrying. So far, the Government's policy has achieved only a fall in output of 2 per cent. in the United Kingdom. That was the position at the end of 1979. Consumer spending in 1979 was down by 4 per cent. Retail sales were down by 6 per cent. I have listened to Conservative Members and they have tried to present this as a success story, as something to be pleased about. However, hon. Members are entitled to ask when Ministers expect to see a buoyant economy. They promised a buoyant economy during the election of May 1979.
We have been freed from the restrictions of high taxation. We have been freed also from the planning restrictions that the hon. Member for Renfrewshire,

East (Mr. Stewart) mentioned. The hon. Gentleman made demands upon his Government. However, the Government claim to have met those demands in the Budget of last year. That claim was made in statement after statement on policy by senior members of the Cabinet. If we have been freed from the shackles that were imposed on the economy by the Labour Party, we must ask where that supposed success is. The success seems to have evaporated. Indeed, it never existed.

Mr. Ernie Ross: My hon. Friend mentioned the statement made by the hon. Member for Renfrewshire, East (Mr. Stewart). The hon. Gentleman indicated that the economy had expanded. He referred to the Barrows in Glasgow. However, 80 per cent. or 90 per cent. of the goods sold in the Barrows are imports. They in no way help the Scottish economy.

Mr. Hogg: I confess that I am a frequent visitor to the Barrows. My hon. Friend pronounces the word "Barrows" wrongly. However, he comes from Dundee and can be expected to get these things wrong. My hon. Friend is perfectly correct. The goods sold in the Barrows are all imports. I went to Petticoat Lane last Sunday afternoon, and that was a mistake as well.
I shall return to the serious point that I was endeavouring to make. There has been no rush to invest. We were promised that people would convert the money released from direct taxation to promoting growth. We were told time and time again by Conservative Members that it would produce investment. That has not happened. We were told that people would convert the opportunity given to work harder and earn more, produce more and unlock the forces of economic growth, into building a thriving economy. That has not happened. In winding up, the Minister must tell us what has happened and why the economic policies to which he and his colleagues subscribe have failed so miserably.

Mr. Foulkes: Will my hon. Friend give way?

Mr. Hogg: I shall give way to my hon. Friend because I should hate to discriminate against him.

Mr. Foulkes: I am glad that someone is willing to give way to me.
Will my hon. Friend confirm that the position is quite the reverse from that predicted by the Government? Instead of new enterprises opening up, in the past six months in Scotland 30 major and innumerable minor firms have closed.

Mr. Hogg: That is absolutely the case. My hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar) can also relate problems in his constituency over closures. We have heard about Kilmarnock, so the problem is not limited to west central Scotland. It exists throughout Scotland. The Secretary of State presides over that scene, and the Minister will be faced with the task of explaining it away—I hope, in a short time. I shall move on, so that we can reach that exciting part of the evening's events.
The Government's record is deplorable. Unemployment in the United Kingdom stands at 5·9 per cent. and at 7·7 per cent. in Scotland. There are only 16,824 job vacancies in Scotland. One hon. Gentleman presented that fact as something to be pleased about. Inflation is running at 18·4 per cent., and much of that has been unleashed by this Government's measures. In an effort to maintain living standards, earnings are increasing, and that is making inflation worse. The Government plough on with their policy of cutting public expenditure, but it has already been shown to be a failed strategy.
There is a total lack of growth in private manufacturing. There is substantial evidence to suggest that for every job lost through public expenditure cuts a job is also lost in the private sector. Government Members should have regard to that when they go to their constituencies to argue the case for cutting public expenditure.
We are witnessing longer dole queues, less retail spending, less demand on manufacturing and, consequently, less investment. The Government are determined to cut the Civil Service and to make cuts in local goverment. They are cutting education and social work. On top of that, public service charges are being increased. The Government have increased gas prices by 30 per cent., and

increased electricity prices and postal and telephone charges. We are expected to believe that that is a recipe for economic progress and growth.
The Government are oblivious to the needs of the economy, especially in regard to Scotland. In Scotland we must take positive steps to attract jobs. The Government offer doctrine and policy but no positive action. There is mounting public anxiety about the vacuum of lost jobs in our traditional industries and the apparent inability of the Government to secure new jobs in new industries.
I expect that all hon. Members saw the article in the Sunday Mail on 10 February, which illustrated that fact. The Sunday Mail did Scotland a service by drawing attention to the Irish success in attracting joss in the electronic industries, with 97 new firms last year and in electronics a total of 4,655 jobs. Perhaps when the Government spokesman comes to wind up, he will comment on what has happened in Ireland.
Without wishing to deal with what the Select Committee may find, I think it will be helpful to this House, in its future consideration of the Scottish economy, for it to be able to refer to the report of the Select Committee on inward investment. The Under-Secretary must turn his attention to the problems of inward investment and must explain why the strategy of this Government has failed. We want to know when and how the Government will achieve a growth in the economy. We are entitled to know their plans for reducing unemployment. We are entitled to know how they intend to expand the manufacturing sector and what positive steps they are taking to do so. We are entitled to demand that they call a halt to the cuts in public expenditure, because these are not in the interests of the well-being of the Scottish economy.

Mr. David Myles: I shall be brief, and, I hope, constructive. After listening yesterday evening to tedious and unconstructive speeches, I had thought that I might be treated to something rather better today. I thought that at least the hon. Member for Dunbartonshire, East (Mr. Hogg) would plough a new furrow; instead he remained firmly fixed in the old one that every hon. Member


on the Opposition Benches has turned over. Perhaps I can plough some new land and be constructive.
Because the majority of people in Scotland live in the central belt and are or have been engaged in the factory production type of industry, any debate on this subject is liable to concentrate on the problems of such people and to assume that any solution to the problems of the Scottish economy must be found here, ignoring the vast areas of Scotland that have not engaged in such industry. This is a well worn path, bestrewn with failures. In voting for a Conservative Government, the people in the North-East of Scotland expected that there would be a fresh approach. I am sure that in time there will be. Time is the important thing. Hon. Members on the Opposition Benches forget that they had five years in which to put the economy into the mess that we are trying to get it out of today.
By definition, regional development grants are selective on a geographical basis. I understand that if we stick to such regional grants it is quite logical to concentrate them, together with more aid, in the areas of highest unemployment. This is, however, far too broad a solution of our problems, with the increased mobility of labour that our new housing policy will make possible. Would it not be more sensible to give aid and encouragement to viable and worthwhile industries wherever they may be, and irrespective of size? I suggest that it must be better—I admit that administratively it is much more difficult—to get 1,000 small firms to employ one extra person than to initiate one doubtful enterprise with 1,000 employees.
I apologise to my right hon. Friend if he has said that in all the recent speeches that he has made on the Scottish economy. However, it shows that great minds think alike. Surely that approach would create more stability and insure us against sudden disastrous unemployment problems, such as those that we are now experiencing, as a result of the uninspired and—I put on my spectacles—myopic thinking of our predecessors.
The Government were elected on a platform of encouragement for small businesses. Let us honour our commitment. As my hon. Friend the Member for Moray and Nairn (Mr. Pollock) told us,

we must support the sub-postmasters. Is that approach possible? I believe that it is.
I cannot complete my speech without mentioning farming. If every farm were to employ, on average, one more person—there is no doubt that they could do just that with advantage to production and efficiency—unemployment would be reduced by about one-sixth. That is worth thinking about. We want to support agriculture and make it expand. How many of us know of small business—for example, plumbers, electricians, painters, joiners—

Mr. Allan Stewart: Moonlighters?

Mr. Myles: My hon. Friend says "Moonlighters?" However, there are many such tradesmen running one-man businesses who are grossly overworked. They dare not take on outside labour, because of the enormous difficulties that may ensue. Can we not encourage the use of the many unused farm buildings in the countryside in Scotland to house small enterprising endeavours? I know of a thriving rubber stamp-making plant that is so housed, and it is most successful. Of course, there are many rubber stamps on the Opposition Benches. I urge my right hon. and hon. Friends to seize on this new strategy and to encourage increasing employment in areas of proven worth.
As I have already reported, Moray district is envisaging only a 1p in the pound rate increase. Another attractive home for small enterprising endeavours is the Banff and Buchan district, which is proposing a reduction in rates by 2p in the pound for the second year in succession. Who said that we forced local authorities to increase their rates? Surely authorities such as the two that I have cited are those in which we should be encouraging expansion and making even more attractive, rather than withdrawing such help and encouragement, to which they have become accustomed.
Lastly, I make a plea for the whisky industry. Perhaps it is a plea that should be directed to my right hon. and learned Friend the Chancellor of the Exchequer. The hon. Member for Clackmannan and East Stirlingshire (Mr. O'Neill) told us, in his selfish way, that we had to stop exporting bulk whisky. If we do that we


shall stop the production of whisky to a certain extent. Two massive maltings have just been erected in Banffshire and I do not want to see whisky production halted or cut down in that area.
Do not let us kill the goose that laid this lucrative liquid egg. If possible, let us encourage not only the distilling but also the storage and bottling of this valuable product in such suitable surroundings.

9 pm

Mr. Jim Craigen: I am glad that the sense of humour of Hamish Watt lives on. Listening to the Secretary of State for Scotland this afternoon I thought that he was even more relaxed than usual. Perhaps the news at the weekend that Teddy Taylor has possibly found a seat in the Home Counties helped. If he is successful, and the track record of the Scottish Office continues in its present form, it is possible that the Prime Minister will decide that the safest seat for a Tory Secretary of State for Scotland is in the South of England.
Yesterday the Department of Employment gave me figures showing that 63,000 redundancies have been notified to that Department since the general election, although 14,500 of them have been withdrawn. In other words, 920 establishments have been threatened with the prospect of redundancy or have closed since the general election. Bad as the unemployment figures are, I think that the Secretary of State must share the growing concern about youth unemployment and the rising number of young people who are out of work. The figures for those under 25 years of age show that youth unemployment is running at more than double the average for all age groups.
The problem is becoming much more acute for those who have been out of work for a long time. There is a part of my own area for which the planners have come up with figures showing that more than one-third of the male population and one-fifth of the female population has been out of work for one year.
I hope that the Minister will give a firm Government commitment to the Mary-hill corridor project. As he knows, this is a project which is shared between the constituencies of my hon. Friend the Member for Glasgow, Kelvingrove (Mr.

Carmichael) and myself. One of the features that is now coming out in the local plans is the need to provide more jobs for this area. For years the planners argued that there were insufficient suitable industrial sites. They are now, hopefully, trying to make amends for past sins and attempting to increase the number of areas zoned for industrial development.
One point that keeps coming up time and again is the high percentage of unqualified, unskilled and unwanted labour within the community, which seems to make nonsense of the closure of the skillcentres on Clydeside. Two years ago I went to see the chairman of the Manpower Services Commission in Scotland and tried to convince him of the need for a skillcentre in Maryhill. I also saw my right hon. Friend the Member for Rutherglen (Mr. MacKenzie), the then Minister of State, Scottish Office. I must have put forward a good case, because I see that Rutherglen has been selected as the site for a relocated skillcentre in Clydeside. The fact remains that there is a considerable need for the improvement of retraining facilities in the area.
While I welcome the extent to which the Youth Opportunities Programme is to be expended, I believe that the Minister should realise that this scheme is not entirely elastic, and there are limitations to its expansion in the years ahead. In giving a commitment—as I hope the Minister will tonight—about the Maryhill corridor project, the Minister must realise that co-operation here between the Glasgow district council and the Strathclyde region already has the backing of the Scottsh Office because of work that was done when my right hon. Friend the Member for Glasgow, Craigton (Mr. Millan) and my hon. Friends the Members for Glasgow, Queen's Park (Mr. McElhone) and for Glasgow, Provan (Mr. Brown) were at the Scottish Office. They brought to fruition this much smaller and more manageable area than that in Gear.
One of the developments that I welcome is the introduction of small factory units. I hope that the Minister will be sympathetic to cases where the Scottish Development Agency is trying to introduce such units. Inevitably there are problems which arise over the higher costs of building these factories, but there is a considerable demand.
While paying tribute to the SDA, which has done a reasonable amount of work in my area, especially on environmental improvements, I must point out that I had occasion to involve the agency in assisting a firm in my constituency that wanted to expand its present premises. One can imagine my concern when I heard recently that the SDA had mentioned the possibility of that company relocating at the Singer site. I do not send the SDA along to my constituency so it can persuade firms to leave. I send it along to help to encourage them in their plans for expansion.
I refer to the question of enterprise zones, which were mentioned by the hon. Member for Renfrewshire, East (Mr. Stewart). It does not really matter where these zones are located, but I hope that we will not see a game of musical chairs in West Central Scotland. If favourable conditions are created in one area of West Central Scotland, industry may be encouraged to move from present locations in other parts of west-central Scotland to that favoured area. That would cause a great deal of concern in this House.
The reason why the particular company got in touch with me, asking for SDA assistance, was that it found that Scottish banks were not interested in investing in manufacturing. I gather that some foreign banks are more interested and that they are prepared to put themselves out in a way that Scottish banks are not. We all know that technology has increasing access to capital, but in terms of employment prospects it is not labour-intensive. I believe that the problem will become more acute as pension and insurance funds become more centralised and lack of investment decisions has its impact in areas such as the West of Scotland.
I doubt whether the Minister has properly evaluated the impact of his current policy of selling council houses, which will have a considerable effect on money supply. If, as seems highly likely, the local authorities are unable to fill the gap, the banks, which are already under Government pressure, may be asked to step in.
I had wanted to make one or two points about microelectronics, but time does not permit.
We have welcomed investment from the United States in west-central Scotland over the years. Now, it seems, we are looking to Japan. I hope that we can also import an idea that the Japanese practise in bringing together their hanks, Government, employers and trade unions in a co-operative effort to determine the areas that can be made winners for Japanese industry. There is, at the moment, a terrible fog over Government policy in trying to provide more jobs for west-central Scotland. It is a great pity that so much Government energy seems to be devoted towards disengagement at a time when the Government cannot afford to be operating in neutral gear.

Mr. Harry Ewing (Stirling, Falkirk and Grangeinouth): One of the problems faced by the Opposition in this debate is that we have been anxious to criticise the Government for their economic, industrial and employment policies, while not wishing to give the impression that we ever expected that they would be capable of delivering more than they have delivered since 3 May. As my right hon. Friend the Member for Glasgow, Craigton (Mr. Millan) said in opening the debate for the Opposition, we always knew that the Secretary of State and his Under-Secretary, the hon. Member for Edinburgh. North (Mr. Fletcher), did not have the ability to run the Scottish economy and did not understand its basic problems. It is perhaps unfair to us to expect the Secretary of State and his hon. Friend, without that ability, to come to grips with the problems of the Scottish economy. In criticising the Government, I should not wish to give the impression that we expected any more from the Secretary of State or from his hon. Friend the Under-Secretary, but, as my right hon. Friend the Member for Craigton said, it is a tragedy that the disaster has taken place much sooner than we had expected.
Another tragedy of the debate has been the astonishing complacency and the almost cavalier attitude of Government Back Benchers to the economic problems of Scotland. It is as if those problems did not exist. The hon. Member for Edinburgh, North is now styled as "Minister for Industry" in the Department. I am sure that a great deal of expenditure was incurred in changing the letter headings.


For every day, including Saturday and Sunday, that the Minister has been in charge of industry and employment in Scotland 138 people have lost their jobs. If that is a record of which the Minister wishes to be proud, I hope that he will justify it when he winds up the debate. It is an outrageous and disgraceful record for any Minister that 138 people—

The Under-Secretary of State for Scotland (Mr. Alexander Fletcher): rose—

Mr. Ewing: The Minister will get plenty of time to wind up the debate. I shall give way in a minute. It is a disgraceful record that for every day of his ministerial career so far 138 people should have lost their jobs.

Mr. Fletcher: I suppose that the hon. Gentleman is suggesting that I should be ashamed of the fact that the total is not nearly so big as that achieved by his party when in office.

Mr. Ewing: If I have learnt one thing since going into opposition, it is to anticipate the rather silly interventions of the hon. Gentleman. I have the figures. They were given by his right hon. Friend the Secretary of State on 17 July in the Scottish Grand Committee. When talking about the unemployment figures his right hon. Friend said:
in other words, an additional 1,300 unemployed for every month".—[Official Report, Scottish Grand Committee, 17 July 1979; c. 12.]
The monthly figure for the Tory Government—the Secretary of State had better be quiet—since they came to power is over 4,000 a month. The Minister has the impertinence and the cheek to interrupt me and suggest that, somehow, our figures are worse than theirs. On the evidence of his right hon. Friend the Secretary of State on 17 July, the increase in unemployment under the Labour Government was 1,300 a month. The figure in last month's Department of Employment's statistical bulletin was 4,500. A total of 138 people have lost their jobs for every day that the Ministers have been in power. It is a disgrace, but it is no more than we have come to expect from the Government.
The Under-Secretary was on Radio Forth on the day before he went to America and he criticised Scottish workers, saying that we were our own

worst enemies, were too strike prone and that industrial output was disgraceful. Those were the words of a Minister who was about to leave to sell Scotland to America. What an ambassador for Scotland! It is little wonder that the hon. Gentleman came back with no jobs—a promise made and a promise broken.
The hon. Gentleman told us that regional policy would be meaningful. He said in Committee on the Industry Bill that the most meaningful aspect of regional policy was the IDC policy and that it did not cost anything. The limits on the IDC policy are now so high as to be meaningless—another promise made, and another promise broken.
The Under-Secretary told us that the SDA would be able to play a more meaningful role in the Scottish economy and Scottish industry, but he proceeded to prescibe the limits under which the SDA could invest—another promise made, and another promise broken. The Under-Secretary has made and broken more promises than has George Best.

Mr. Bill Walker: I am interested in the hon. Gentleman's comments about promises, because I recollect that the Labour Party manifesto of 1974 said:
The Labour Party does not promise anything in this Manifesto which cannot be achieved in Scotland in the next 5 years. The first and overriding priority facing Scotland in the next 5 years will be to create more and better jobs".
The Labour Government doubled unemployment. Is that keeping promises?

Mr. Ewing: I do not want to slap down the nice hon. Member for Perth and East Perthshire (Mr. Walker) in the same way as I slapped down the Under-Secretary. The Secretary of State admitted that there were more people in work when the Labour Government left power in 1979 than there were when he left the Scottish Office in 1974. Indeed, that confession was the only bright spot in the right hon. Gentleman's speech.
The continual bleating that when the Secretary of State left power in 1974 unemployment was only 86,000 is inaccurate.

Mr. Walker: Will the hon. Gentleman give way?

Mr. Ewing: No. I have already given the hon. Gentleman a lecture, and one lecture in an evening is enough for any hon. Member from Perth and East Perthshire to absorb.
When we came to power in February 1974 about 300,000 people in Scotland were on a three-day working week, we had come through a Christmas when there were no lights on the Christmas trees and when old folk were sitting in cold homes and dying of hypothermia. That was the situation that we inherited—not the record that the Secretary of State claims to have left behind him in 1974.

Mr. Younger: Will the hon. Gentleman give way?

Mr. Ewing: I shall give way to the Secretary of State provided he is prepared to admit that when we came to power in 1974 the whole of the Scottish economy was on a three-day working week.

Mr. Younger: rose—

Mr. Ewing: Will the right hon. Gentleman admit that?

Mr. Younger: The description given by the hon. Member is accurate. There were fewer people out of work in 1974 than there were when he left office. That is the measure of the hon. Gentleman's achievement.

Mr. Ewing: I am grateful for the admission of the Secretary of State that there were 300,000 people on a three-day working week in Scotland in February 1974. I hope that we shall hear no more rubbish about the record of the right hon. Gentleman when he left the Scottish Office.
An impression has been given that the effects of the Government's regional policy, such as it is, will not be felt until August of this year. Every Minister in the Government knows that that is not true. The day on which the announcement was made that about 40 areas would be descheduled under the Government's proposal, companies decided to take their investment decisions against the background of that announcement. We have already seen the impact of the Government's decision in the Borders, and the problems cannot be brushed aside. A textile firm in the Borders has abandoned

expansion because the area is to lose its regional development status. That will continue to happen throughout Scotland in the 42 areas that have been de-scheduled.
I hope that the Minister will not pretend that the decision to deschedule those areas will have no effect on industrial development. The decision will have a disastrous effect, and the tragedy of this debate is that the only people who are not worried about the Scottish economy are the Secretary of State and his hon. Friends. We know that all the commentators and economists in Scotland are desperately worried about the Scottish economy, and the investment intentions of Scottish companies—as published by the CBI—are very worrying. On average, well over 40 per cent. of companies in Scotland see a less bright future in the next four months than compared with the previous four months, and that pattern will be repeated.
The only new jobs that have been created by anyone loosely connected with the Government—and I mean loosely connected—have been created by the hon. Member for Aberdeen, South (Mr. Sproat). He has bulldozed his right hon. and hon. Friends into producing 1,000 snoopers to pry into social security cases. They are to be equipped with soft shoes and binoculars, and no doubt both of those items will be imported. They will not even have been manufactured in this country. The only new jobs that we shall see—not only in the Scottish economy but in that of the United Kingdom—are the 1,000 snoopers' jobs which the hon. Member for Aberdeen, South has succeeded in convincing his right hon. and hon. Friends should be created.
I have noticed that at regular intervals during the last few months Ministers from the Scottish Office have been attending the official openings of projects that were started under the Labour Government. I do not complain about that. When we came to power in 1974 we had the pleasure of attending the official openings of projects started by the Conservative Government. However, once the official openings have been exhausted, and if Ministers are invited to attend all the closures that will take place as a result of Government policy I can assure them that they will not have sufficient


days or hours in the week to attend those closures.
I was astonished that the hon. Member for Renfrewshire, East (Mr. Stewart) showed such abysmal ignorance of his constituency. The Chrysler factory would no longer exist if we had left it to the Conservative Party. When the Labour Government mounted their rescue operation in the last Parliament, Conservative Members voted against it with one exception—the late revered Miss Harvie Anderson, who refused to vote with the Opposition. I doubt whether her successor would have had the good sense to do that. The same applies to shipbuilding. When we attracted the Polish shipbuilding order we were pilloried by the present Secretary of State and his hon. Friends.
The hon. Members for Moray and Nairn (Mr. Pollock), for Banff (Mr. Myles) and for Fife, East (Mr. Henderson) argue in favour of public expenditure cuts, provided that they do not take place in Moray and Nairn, Banff and Fife, East. They do not care what happens to the other 68 constituencies in Scotland. That is symptomatic of what is happening on the Tory Back Benches. Tory Members have cold feet when they see the impact of the Government's policies on their constituencies.

Mr. Henderson: I said that although the change in development area status had not been beneficial in East Fife, I recognised that it was a positive help to Scotland as a whole.

Mr. Ewing: We can place on record that the hon. Member for Fife, East believes that the change in development area status will be good for Scotland as a whole. In a year's time, when unemployment is over 250,000, I shall give the hon. Gentleman a good meal of his own words, and no doubt he will suffer from indigestion.
I was interested in the comments about St. Andrews university and it being a centre for electronics study. According to the Minister's press release, that university did not even take the trouble to submit proposals.
Reference has been made to the increase in funds for the Welsh Development Agency. Hon. Members have said

that Wales has more serious industrial problems than Scotland. It is no part of our argument to say that Wales should not receive additional funds. We are delighted that the Principality is fortunate to be represented in the Cabinet by a Secretary of State who obviously has the interests of his country at heart.
That is more than we can say for the Secretary of State for Scotland. Unemployment in Scotland, on every count, is worse than it is in Wales. We shall not tolerate the Secretary of State telling us that the Welsh problem is worse. He either does not know what the problem is, or he does know and is hoping that no one finds out. The seasonally adjusted unemployment figure for Wales in January was 7·5 per cent. The Scottish equivalent figure was 7·7 per cent.—worse than the Welsh figure. The crude figure for Wales was 8·3 per cent. and for Scotland 8·9 per cent. I am not arguing that Wales should not receive the £48 million, but I am arguing that the Secretary of State for Scotland should have been aware of the serious nature of the problem in Scotland.
The right hon. Gentleman should have gone to the Cabinet and not only backed his right hon. Friend the Secretary of State for Wales but argued the Scottish case for an increase in the amount of money available to Scotland to deal with its problems, especially those in the West of Scotland, Clyde, parts of Glasgow, the Dundee area, and so on. From earlier remarks made by the Secretary of State, it is obvious that he did not know that the unemployment figures for Scotland were worse than those for Wales. It is an outrage that he did not know the true position in his own area.
It would be wrong of any Opposition speaker, when winding up a debate, not to try to help the Secretary of State. He does not have the ability to help himself. As well as suggesting that he should resign—I know that he will not do so—I wish to make a few other suggestions. I hope that he will argue in the Cabinet for the Scottish economy to be protected from the worst effects of the Government's policies.
Before I continue with my suggestions I wish to tell the hon. Member for Dundee, East (Mr. Wilson) that I heard half of his speech. I missed the half in


which he attacked the Labour Party. The Tory Government is as much a creation of his party as it is of the voters south of Birmingham. It is the height of impertinence for him to pretend to the people of Scotland that he is not as much responsible for the Tory Government imposing their policies on Scotland as are the voters south of Birmingham.
I wish to continue with my assistance to the Secretary of State. He must return to his Cabinet colleagues and obtain a reversal of the decision on regional policy. The incident that I have mentioned about the Borders area is an example that will be repeated throughout Scotland. We cannot afford to have that happen. I hope that the Secretary of State will argue the case for the retention of the regional development areas as they are at present.
We are not arguing that regional policy should remain static. As regional policy becomes successful it demands change. We are arguing that, in a deteriorating situation—as is the case in the Scottish economy—the present protection for those areas should be retained. With the £225 million saving on regional policy, it is not insignificant that the Secretary of State gave up 20 per cent.—£45 million—to his Cabinet colleagues. That is an extraordinary percentage for a Secretary of State to give away.
Because most unemployment begins in the construction and building industries and works its way through various other industries, there is a great and urgent need for a building package to be released as soon as possible.
In case the Secretary of State thinks that that would involve new money, I must tell him that it would be a direct transfer of unemployment benefit into the economy in the form of a building package. There is a great need to modernise schools, to continue the hospital building programme, and to continue the thermal insulation programme.
I understand that the Government are considering ending the thermal insulation programme. I hope that that is only a nasty rumour and that it will not be confirmed. Half of the local authority houses in Scotland remain to be insulated. The British Gas Corporation, as a result of the price increases forced upon it by the Government, will make £600 million

profit next year. A small part of that profit should be spent on thermal insulation. That will also protect jobs in the manufacture of thermal insulation material and in its installation. I hope that with the building package, with thermal insulation and with the regional policy, I have given the Minister sufficient to go back to his colleagues and argue that Scotland is a special case.
In case the Secretary of State thinks that it is only I who is arguing a special case for Scotland, I direct his attention to an article in the Sunday Mail by Teddy Taylor, who now works as a reporter for that newspaper. In his column on 9 December 1979, speaking about the appointment of the new chairman of the Scottish Development Agency, Robin Duthie, Teddy Taylor said:
First, he must attract the new and growing industries to Scotland to take up the slack of the declining traditional firms.
Second, he must make sure that the factories and other facilities are available for home and overseas firms contemplating expansion.
And third, he must keep banging at the doors of Whitehall to remind them that Scotland has special problems of its own which call for special remedies.
I could not have put it better to the electors in Southend, East, and I hope that in quoting Teddy Taylor I have convinced the Secretary of State and his hon. Friend that there is a great need for the kind of measures for which even Teddy Taylor was calling no later than 19 December last year.
I turn to skillcentres. It is an absolute disgrace that the Government are running down training programmes. The Minister will no doubt tell us that Rolls-Royce is looking for 200 workers. Of course it is, but it cannot find them, because there are not sufficient trained personnel and the Government are cutting back on training programmes. The Minister seems determined to do as much damage as possible to the economy. Everything to which the right hon. Gentleman has turned his hand has gone sour. Even the team that he supports is to be relegated this year. He is probably the most unsuccessful Minister to walk through the doors not only of new St. Andrew's House, but of old St. Andrew's House.
I hope that the Secretary of State has got the message that we are all deeply


and seriously concerned about the state of the Scottish economy and the way in which the Government are allowing it to drift. I urge my right hon. and hon. Friends, when it comes to showing our disapproval in the Division Lobby, to join me in voting against the Government.

The Under-Secretary of State for Scotland (Mr. Alexander Fletcher): Listening to that knock-about speech by the hon. Member for Stirling, Falkirk and Grangemouth (Mr. Ewing), I find it difficult to believe that he is seriously concerned about anything—certainly not the serious economic situation that the Government inherited from the previous Labour Government and about which he had remarkably little to say.
The hon. Gentleman made a number of points towards the end of his speech which he offered as free advice. I am old enough to know that one should not readily accept free advice.
The hon. Gentleman said that the Government should change their regional policy because of the disastrous effects that it would have on the Scottish economy. In evidence he produced a cutting from The Scotsman of Monday. In effect, the hon. Gentleman said that regional policy should be changed because of one unknown textile company in the Borders. We do not know what company it is. We believe that it is as much to do with market conditions in the textile industry throughout the United Kingdom that this investment may not be taking place as with any part of regional policy.
The hon. Gentleman referred to skill centres. The study that is taking place in Scotland and elsewhere in Britain by the Manpower Services Commission was instituted by the previous Labour Government, of whom the hon. Gentleman was a member. It is a matter not of reducing the number of places, but of looking at the distribution of skillcentres and seeing how to apply them better to the needs of various parts of the country. He produced the usual sort of Labour spending list, ignoring the fact that after five years of Labour government it is not simply a matter of the till being empty, but that Britain will have to borrow vast amounts for many years.
In changes that we have made on regional policy, we have tried to direct the greatest amount of help to those areas where it is most needed. As a result, there are now more special development areas in Scotland than there were under the previous Government. The purpose of regional policy is to try to direct aid where it is most needed.
I refer to the opening speech of the right hon. Member for Glasgow, Craigton (Mr. Millan). I am glad that he accepted the need to put the debate in the context of the United Kingdom economy. That is obviously right. As my right hon. Friend the Secretary of State said in his opening speech, the record of the previous Labour Government speaks for itself. The position is serious, a point made by the hon. Member for Dunbartonshire, East (Mr. Hogg). It is not simply a matter of the last nine months of Conservative government. The position has been serious for the last nine years. Manufacturing output today is at the same level as it was in 1974, despite the fact that wages have more than doubled. That statement cannot be repeated too often. Since 1975, as the Secretary of State pointed out, exports of manufactured goods from the United Kingdom have risen in volume by 12 per cent., while imports of manufactured goods have risen by about 65 per cent. in the same period.
When Labour Members make speeches in the House—no doubt directed towards the press at home and their constituents —and produce a shopping list, they would he doing their constituents a better service if they were also to point out the seriousness of the economic position which faces every part of the United Kingdom. In Scotland, as Labour Members should know and should remember, unemployment almost doubled between 1974 and 1979. But the right hon. Member for Craigton is not all bad. He kindly contributed a caption summing up his term of office. In his own words, it was "A record of unmitigated failure".
The right hon. Member for Orkney and Shetland (Mr. Grimond) surprised me when he talked about jobs for Scotsmen in the oil industry. Obviously Scots have an advantage by being on the spot when the Manpower Services Commission advertises vacancies for all sorts of jobs throughout Scotland. Perhaps the right


hon. Gentleman was thinking about the fact that there is a large immobile working population in Scotland. That is one of the challenges faced by the Government in trying to make dramatic changes in housing policy and giving people the opportunity to buy their council house as a means of encouraging labour mobility.
The right hon. Gentleman also referred to air services. I, too, find it difficult to understand why people who travel regularly by air should subsidise those who travel once a year. I am afraid that I cannot give him the answer to that question. It is a matter for another Minister.
Both he and my hon. Friend the Member for Argyll (Mr. MacKay) mentioned the Highlands and Islands airport. My right hon. Friend the Secretary of State announced a subsidy of £2.5 million to the Civil Aviation Authority in 1980–81, compared with the £1.5 million offered by the Department of Trade in 1979–80. That should enable the CAA to reduce at least some of its charges.
The hon. Member for Glasgow, Mary-hill (Mr. Craigen), my hon Friend the Member for Argyll, the hon. Member for Bothwell (Mr. Hamilton), and my hon. Friend the Member for Renfrewshire, East (Mr. Stewart) raised the question of inward investment. There are two main issues on the subject on which I should like to comment.
First, should we seek to compete for internationally mobile investment? This question is sometimes raised because of fears that Scotland will become a "branch factory" economy, overdependent on the changing strategies of multinational corporations. That was impled in the criticisms of the hon. Member for Kilmarnock (Mr. McKelvey).
The closures of Singer and Massey-Ferguson and other large corporations are used as evidence for that view. My reply to that is that Scotland has gained considerably from overseas investment, particularly over the past 30 years. Over a quarter of the 250,000 new jobs created in Scotland since 1950 have been in companies from overseas. These firms have brought with them to Scotland new and progressive management styles, modern products and processes, invariably good industrial relations and considerable

benefits to the economy as a whole. In short, we cannot afford not to pursue every avenue open to us to secure new internationally mobile investment for Scotland.

Mr. Buchan: I wonder whether the Minister will comment on the comparative figures of the inflow and outflow of industrial investment in the United Kingdom.

Mr. Fletcher: I shall come to the more up-to-date position later in my remarks.
It is absurd to suggest, as has been said in a number of circles, that we in Scotland should choose between indigenous investment and investment from overseas. The fact is that we need both. They are perfectly compatible with each other and they are equally essential to the development and growth of the Scottish economy.

Mr. Millan: No, they are not.

Mr. Fletcher: I do not know how well the right hon. Gentleman reads the Scottish press, but if he reads it he will find comments about that. [Interruption.] I hope that Opposition Members will contain themselves for a moment.
The second question is whether the organisational arrangements that currently exist for promoting Scotland overseas and securing inward investment to Scotland are satisfactory.
The right hon. Member for Craigton is a great mutterer. He was not listening to much of the debate, or he would have known that several hon. Members raised these very questions. If he is not interested, perhaps he will keep quiet and let others listen.
Inward investment in Scotland is the responsibility of the Secretary of State. The Scottish Office negotiates the package of financial incentives appropriate to each case, and for the attraction and promotion of inward investment the statutory agencies working in this field—the SDA, the HIDB and the new towns—are also responsible to the Secretary of State. They work to guidelines that we have given them, and I am therefore satisfied, as is my right hon. Friend, that we have an effective and co-ordinated approach to inward investment.
The Scottish Office also maintains contact with the commercial departments


of the British consulates in the United States of America and elsewhere, and I am glad to put on record our appreciation of the considerable contribution that they continue to make to the Scottish economy.
The hon. Member for Dunbartonshire, East referred to the Irish Industrial Development Authority and to Ireland generally. As hon. Members will know, the Republic of Ireland has had considerable success in the attraction of industry from abroad. Much comment in Scotland has focused on the part played in this success by the Republic's Industrial Development Authority, as compared with the SDA. Such a comparison is completely misleading. It is claimed that the IDA combines the functions of the Department of Industry, the SEPD and the SDA, with the inference that, by comparison, our organisation is terribly cumbersome. However, the Scottish Office acts for the Department of Industry in Scotland and the SDA is responsible to the Secretary of State. Again, I am satisfied that we have a coordinated approach, under the control of the Secretary of State, which is working well and which is appropriate to Scottish conditions.
It is also quite illusory to suppose that the Irish success is simply—or perhaps principally—a matter of the structure and organisation of the IDA. The financial package on offer is likely to weigh more heavily with a potential investor. In this area, although financial assistance in Scotland is substantial, the combined financial and fiscal incentives offered by Ireland cannot be matched by Scotland. In the financial area Scotland is constrained by more rigorous EEC limits and, in the fiscal area, by policy considerations. I am surprised that the hon. Member for Stirling, Falkirk and Grangemouth did not know that. His party was in government long enough to have found such things out. Grants and tax relief are not everything.
It should not be forgotten that Scotland enjoys considerable advantages over Southern Ireland. It has a long tradition in the manufacturing industry and an excellent supply of skilled and adaptable labour. It has a highly developed education system, which has close links with industry. There are eight universities in

Scotland and many more technical colleges. That ensures a constant supply of highly qualified managers, engineers and technicians. We also have an established infrastructure, with good communications and transport facilities. These points usually rate just as highly with potential investors as does the whole question of financial incentives.
My hon. Friend the Member for Moray and Nairn (Mr. Pollock) and my hon. Friends the Members for Banff (Mr. Myles) and for Galloway (Mr. Lang) were right to mention the services and facilities in rural areas. In recent years we have learnt that big is not beautiful. A healthy rural economy can come only from a healthy British economy. This is the whole projection of Government policy. The hon. Member for Bothwell complained about reductions in regional development grants. He will know that Lanarkshire is still very much part of the special development area. The regional development grants in Lanarkshire are still at 22 per cent. They will continue at 22 per cent. under Government policy.

Mr. Robert Hughes: The Minister may recall that his right hon. Friend said that a special study would be made of the North-East of Scotland in relation to the oil economy. He may also know that a deputation covering every local authority from the Grampian area—and that includes many of his political friends—has argued that no changes should be made until the study has been completed. When will we get an answer to that question? Why can we not have one tonight?

Mr. Fletcher: The hon. Gentleman has not attended much of the debate. I should not have given way to him. However, the study of the impact of North sea oil on indigenous industries in areas such as Aberdeen is under way. It should be completed before 1982 and before changes in policy are finalised. That is the commitment that was made.

Mr. Bill Walker: I should like to take this opportunity to mention regional policy, because it is important to my constituency. [Interruption.] I hope that Opposition Members will listen. Perth has been downgraded. I approve of that. We do not have an unemployment problem in the city of Perth. I also approve


of the decision to upgrade Blairgowrie, where there is an enormous unemployment problem. The community cooperative in Blairgowrie is a splendid example of local people working together.

Mr. Fletcher: My hon. Friend has been very realistic in two respects. He has given a great deal of personal leadership to the community project in Blairgowrie. I certainly wish him well. I only wish that some of his realism in terms of regional policy would spread to Opposition Members. It would help their constituents, as well as those of everyone else.
My hon. Friend the Member for Edinburgh, South (Mr. Ancram) mentioned the increase—

Mr. Ewing: I am grateful to the Minister for giving way. I am anxious to appeal to him before he replies to his hon. Friend. He should not reply to the hon. Member for Edinburgh, South (Mr. Ancram), because he made his speech but did not have the courtesy to listen to any other speech. He has returned to the Chamber only for the winding-up speeches. In accordance with the appeal made by Mr. Speaker, I ask the Minister not to reply to his hon. Friend. If he does, he will encourage other hon. Members to act in a similar way.

Mr. Fletcher: I say to my hon. Friend the Member for Edinburgh, South (Mr. Ancram)—

Mr. Harry Ewing: On a point of order, Mr. Speaker. Only last week you explained to us the normal courtesies of the House, and asked hon. Members to acknowledge them. You said that, having caught your eye and made their speeches hon. Members should have the courtesy to listen to others. The hon. Member for Edinburgh, South did not do so.
I appeal to you, Mr. Speaker, to advise the Minister not to encourage the bad practice of hon. Members making speeches and then leaving the Chamber, yet still receiving a reply from the Minister.

Mr. Speaker: Order. It is not for me to advise the Minister of his reply. I shall say no more on the matter now.

Mr. Fletcher: The hon. Member for Stirling, Falkirk and Grangemouth is not

contributing to the debate. He is indulging in a time-wasting exercise.
My hon. Friend the Member for Edinburgh, South knows that the Secretary of State has outlined to Lothian region the steps that he may take to reduce its overall expenditure in view of the Labour group's refusal to restrict its spending within the ratepayers' means.
My hon. Friend the Member for Fife, East (Mr. Henderson) asked about the prospect of the microelectronics centre coming to Fife. The consultants engaged by the Scottish Development Agency—the Stamford Research Institute—are examining the facilities in all Scotland's main institutions in order to advise the Government on the best location. None of our universities is ruled out.
My hon. Friend also asked about an advance factory in Newburgh and Cupar. I shall ask the SDA to advise us on completion dates. I can tell my hon. Friend that work on the Thornton bypass begins next month.

Mr. Buchan: Will the hon. Gentleman give way?

Mr. Fletcher: My hon. Friends the Members for Galloway and Argyll raised the point—

Mr. Buchan: Will the hon. Gentleman give way?

Mr. Speaker: Order: We cannot have two hon. Members on their feet at the same time. The Minister is not giving way.

Mr. Fletcher: The Opposition ate tending to make a noise rather than a real contribution.
My hon. Friends raised the question of the British Tourist Board advertising on behalf of domestic tourist boards. The advantages clearly outweigh the disadvantages. I shall raise the matter with my noble Friend the Minister of State, and I am sure that he will give his view to my hon. Friends.

Mr. Buchan: Will the hon. Gentleman give way?

Mr. Fletcher: The hon. Member for Clackmannan and East Stirlingshire (Mr. O'Neill) produced a list of spending demands in typical Labour style, without a single suggestion where the money


might come from. That is a simple but effective illustration of the bankruptcy of Labour policies.
Because of the behaviour of Labour Members, I am unable to reach many of the other points raised.

Mr. James Hamilton: The Minister has not covered my point.

Mr. Fletcher: The hon. Gentleman should rather complain to his hon. Friends.
Despite the heated exchanges, I believe that there is a considerable measure of agreement between the parties on regional policy. Agreement across the

Division No. 1921
AYES
[10 pm


Adams, Allen
Gilbert, Rt Hon Dr John
Maxton, John


Alton, David
Ginsburg, David
Millan, Rt Hon Bruce


Archer, Rt Hon Peler
Goldlng, John
Mitchell, Austin (Grimsby)


Ashton, Joe
Gourlay, Harry
Mitchell, R. C. (Soton, Itchen)


Atkinson, Norman (H'gey, Tott'ham)
Grant, George (Morpeth)
Morris, Rt Hon Charles (Openshaw)


Bagier, Gordon A. T.
Grant, John (Islington C)
Morton, George


Beith, A. J.
Grimond, Rt Hon J.
Newens, Stanley


Benn, Rt Hon Anthony Wedgwood
Hamilton, James (Bothwell)
O'Neill, Martin


Bidwell, Sydney
Hamilton, W. W. (Central Fife)
Owen, Rt Hon Dr David


Booth, Rt Hon Albert
Hardy, Peter
Park, George


Bray, Dr Jeremy
Harrison, Rt Hon Walter
Parker, John


Brown, Hugh D. (Provan)
Hattersley, Rt Hon Roy
Pavltt, Laurie


Brown, Robert C. (Newcastle W)
Haynes, Frank
Penhaligon, David


Brown, Ronald W. (Hackney S)
Heffer, Eric S.
Race, Reg


Brown, Ron (Edinburgh, Leith)
Hogg, Norman (E Dunbartonshire)
Radice, Giles


Buchan, Norman
Holland, Stuart (L'beth, Vauxhall)
Roberts, Albert (Normanton)


Callaghan, Rt Hon J. (Cardiff SE)
Home Robertson, John
Roberts, Ernest (Hackney North)


Callaghan, Jim (Middleton &amp; P)
Homewood, William
Robertson, George


Campbell, Ian
Howells, Geraint
Rodgers, Rt Hon William


Campbell-Savours, Dale
Huckfleld, Les
Rooker, J. W.


Canavan, Dennis
Hughes, Mark (Durham)
Roper, John


Cartwright, John
Hughes, Robert (Aberdeen North)
Ross, Ernest (Dundee West)


Clark, Dr David (South Shields)
Janner, Hon Greville
Ross, Stephen (Isle of Wight)


Cocks, Rt Hon Michael (Bristol S)
Jay, Rt Hon Douglas
Sandelson, Neville


Cook, Robin F.
John, Brynmor
Sever, John


Craigen, J. M. (Glasgow, Maryhill)
Jones, Rt Hon Alec (Rhondda)
Silkin, Rt Hon S. C. (Dulwich)


Cryer, Bob
Jones, Barry (East Flint)
Smith, Rt Hon J. (North Lanarkshire)


Cunningham, Dr John (Whitehaven)
Kilfedder, James A.
Snape, Peter


Dalyell, Tam
Lambie, David
Soley, Clive


Davis, Terry (B'rm'ham, Stechford)
Leadbitter, Ted
Spearing, Nigel


Deakins, Eric
Leighton, Ronald
Spriggs, Leslie


Dempsey, James
Lewis, Arthur (Newham North West)
Steel, Rt Hon David


Dewar, Donald
Lewis, Ron (Carlisle)
Stewart, Rt Hon Donald (W Isles)


Dormand, Jack
Litherland, Robert
Stoddart, David


Douglas, Dick
Lyons, Edward (Bradford West)
Stott, Roger


Douglas-Mann, Bruce
Mabon, Rt Hon Dr J. Dickson
Strang, Gavin


Dubs, Alfred
McCartney, Hugh
Straw, Jack


Dunnett, Jack
McDonald, Dr Oonagh
Taylor, Mrs Ann (Bolton West)


Dunwoody, Mrs Gwyneth
McElhone, Frank
Thomas, Dafydd (Merioneth)


Eadie, Alex
McGuire, Michael (Ince)
Thomas, Dr Roger (Carmarthen)


Eastham, Ken
McKay, Allen (Penistone)
Tinn, James


Edwards, Robert (Wolv SE)
McKelvey, William
Urwin, Rt Hon Tom


Ellis, Raymond (NE Derbyshire)
MacKenzie, Rt Hon Gregor
Wainwright, Edwin (Dearne Valley)


Ellis, Tom (Wrexham)
Maclennan, Robert
Wainwright, Richard (Colne Valley)


English, Michael
McMahon, Andrew
Walker, Rt Hon Harold (Doncaster)


Evans, loan (Aberdare)
McMillan, Tom (Glasgow, Central)
Watkins, David


Evans, John (Newton)
McNally, Thomas
Weetch, Ken


Ewing, Harry
McNamara, Kevin
Welsh, Michael


Fitch, Alan
Marks, Kenneth
White, Frank R. (Bury &amp; Radcliffe)


Fletcher, Ted (Darlington)
Marshall, David (Gl'sgow.Shettles'n)
While, James (Glasgow, pollok)


Foot, Rt Hon Michael
Marshall, Dr Edmund (Goole)
Willey, Rt Hon Frederick


Foulkes, George
Marshall, Jim (Leicester South)
Wilson, Gordon (Dundee East)


Garrett, W. E. (Wallsend)
Martin, Michael (Gl'gow, Springb'rn)
Wilson, Rt Hon Sir Harold (Huyton)


George, Bruce
Mason, Rt Hon Roy
Winnick, David

Floor of the House would also be helpful in another area. Public acceptance by the Labour Party that Scotland would and could do more to help itself would be welcomed. If the Labour Party helped the Government to persuade the Scottish people to show the world that productivity and industrial relations can be better in Scotland than elsewhere and persuade miners and steel workers in Scotland to return to work, instead of manning the barricades in Sheffield and Sheerness, it would make a significant contribution to the Scottish economy.

Question put, That this House do now adjourn:—

The House divided: Ayes 165, Noes 210.

Woodall, Alec
TELLERS FOR THE AYES



Woolmer, Kenneth
Mr. Joseph Dean and



Young, Davld (Bolton East)
Mr. Ted Graham,




NOES


Aitken, Jonathan
Goodhew, Victor
Normanton, Tom


Alison, Michael
Gorst, John
Onslow, Cranley


Ancram, Michael
Gow, Ian
Osborn, John


Arnold, Tom
Grant, Anthony (Harrow C)
Page, John (Harrow, West)


Aspinwall, Jack
Gray, Hamish
Page, Rt Hon Sir R. Graham


Atkins, Rl Hon H. (Spelthorne)
Grieve, Percy
Page, Richard (SW Hertfordshire)


Atkins, Robert (Preston North)
Griffiths, Peter (Portsmouth N)
Parris, Matthew


Baker, Nicholas (North Dorset)
Grist, Ian
Patten, John (Oxford)


Banks, Robert
Gummer, John Selwyn
Pattie, Geoffrey


Beaumont-Dark, Anthony
Hamilton, Hon Archie (Eps'm&amp;Ew'll)
Pawsey, James


Bell, Sir Ronald
Hamilton, Michael (Salisbury)
Pink, R. Bonner


Bendall, Vivian
Hampson, Dr Keith
Pollock, Alexander


Benyon, W. (Buckingham)
Hannam, John
Prentice, Rt Hon Reg


Berry, Hon Anthony
Haselhurst, Alan
Price, David (Eastleigh)


Bevan, David Gilroy
Hawkins, Paul
Pym, Rt Hon Francis


Biffen, Rt Hon John
Hawksley, Warren
Raison, Timothy


Blackburn, John
Heath, Rt Hon Edward
Rathbone, Tim


Blaker, Peter
Heddle, John
Renton, Tim


Body, Richard
Henderson, Barry
Rhodes James, Robert


Bonsor, Sir Nicholas
Hicks, Robert
Ridley, Hon Nicholas


Boscawen, Hon Robert
Hill, James
Rifkind, Malcolm


Bottomley, Peter (Woolwich West)
Hogg, Hon Douglas (Grantham)
Roberts, Wyn (Conway)


Boyson, Dr Rhodes
Holland, Philip (Carlton)
Rossi, Hugh


Braine, Sir Bernard
Hooson, Tom
Rost, Peter


Bright, Graham
Hurd, Hon Douglas
Royle, Sir Anthony


Brinton, Tim
Jessel, Toby
Sainsbury, Hon Timothy


Brocklebank-Fowler, Christopher
Jopling, Rt Hon Michael
St. John-Stevas, Rt Hon Norman


Brown, Michael (Brigg &amp; Sc'thorpe)
Kaberry, Sir Donald
Shelton, William (Streatham)


Bruce-Gardyne, John
Kellett-Bowman, Mrs Elaine
Shepherd, Colin (Hereford)


Buchanan-Smith, Hon Alick
Kershaw, Anthony
Sims, Roger


Bulmer, Esmond
Kimball, Marcus
Speed, Keith


Butler, Hon Adam
King, Rt Hon Tom
Speller, Tony


Cadbury, Jocelyn
Knight, Mrs Jill
Spence, John


Carlisle, John (Luton West)
Knox, David
Spicer, Jim (West Dorset)


Carlisle, Kenneth (Lincoln)
Lang, Ian
Spicer, Michael (S Worcestershire)


Carlisle, Rt Hon Mark (Runcorn)
Lawrence, Ivan
Sproat, Iain


Channon, Paul
Lawson, Nigel
Stainton, Keith


Chapman, Sydney
Le Marchant, Spencer
Stanley, John


Churchill, W. S.
Lennox-Boyd, Hon Mark
Stewart, Ian (Hitchin)


Clark, Hon Alan (Plymouth, Sutton)
Lester, Jim (Beeston)
Stewart, John (East Renfrewshire)


Clark, Sir William (Croydon South)
Lloyd, Ian (Havant &amp; Waterloo)
Stradling Thomas, J.


Clarke, Kenneth (Rushcliffe)
Lloyd, Peter (Fareham)
Tebbit, Norman


Clegg, Sir Walter
Luce, Richard
Thatcher, Rt Hon Mrs Margaret


Cockeram, Eric
Lyell, Nicholas
Thorne, Neil (Ilford South)


Colvin, Michael
Mactarlane, Neil
Thornton, Malcolm


Cope, John
MacGregor. John
Townend, John (Bridlington)


Cormack, Patrick
MacKay, John (Argyll)
Townsend, Cyril D. (Bexleyheath)


Corrie, John
McNair-Wilson, Michael (Newbury)
Trippier, David


Cranborne, Viscount
McQuarrie, Albert
Viggers, Peter


Critchley, Julian
Major, John
Waddington, David


Dean, Paul (North Somerset)
Marlow, Tony
Waldegrave, Hon William


Dorrell, Stephen
Mather, Carol
Walker, Rt Hon Peter (Worcester)


Douglas-Hamilton, Lord James
Maude, Rt Hon Angus
Walker, Bill (Perth &amp; E Perthshire)


Dover, Denshore
Mawby, Ray
Walker-Smith, Rt Hon Sir Derek


Dunn, Robert (Dartlord)
Maxwell-Hyslop, Robin
Waller, Gary


Eden, Rt Hon Sir John
Mellor, David
Ward, John


Eggar, Timothy
Miller, Hal (Bromsgrove &amp; Redditch)
Warren, Kenneth


Elliott, Sir William
Mills, Iain (Meriden)
Watson, John


Fairbairn, Nicholas
Mills, Peter (West Devon)
Wells, Bowen (Hert'rd &amp; Stev'nage)


Fairgrieve, Russell
Mitchell, David (Basingstoke)
Wickenden, Keith


Faith, Mrs Sheila
Moate, Roger
Wiggin, Jerry


Fenner, Mrs Peggy
Montgomery, Fergus
Wilkinson, John


Fisher, Sir Nigel
Morrison, Hon Charles (Devizes)
Williams, Delwyn (Montgomery)


Fletcher, Alexander (Edinburgh N)
Morrison, Hon Peter (City of Chester)
Winterton, Nicholas


Fletcher-Cooke, Charles
Mudd, David
Wolfson, Mark


Fookes, Miss Janet
Murphy, Christopher
Young, Sir George (Acton)


Fraser, Peter (South Angus)
Myles, David
Younger, Rt Hon George


Fry, Peter
Neale, Gerrard



Galbraith, Hon T. G. D.
Needham, Richard
TELLERS FOR THE NOES:


Gardiner, George (Reigale)
Nelson, Anthony
Mr. John Wakeham and


Garel-Jones, Tristan
Neubert, Michael
Mr. Peter Brooke


Goodhart, Philip

Question accordingly negatived.

AGRICULTURE AND HORTICULTURE (CAPITAL GRANT SCHEMES)

The Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mr. Jerry Wiggin): I beg to move,
That the Farm Capital Grant (Variation) Scheme 1980 (S.I., 1980, No. 103), a copy of which was laid before this House on 31 January, be approved.
I suggest, Mr. Speaker, that it might be for the convenience of the House if we took at the same time the Horticulture Capital Grant (Variation) Scheme 1980, which was also laid before the House on 31 January.

Mr. Speaker: Is it the will of the House that the two schemes be taken together? So be it.

Mr. Wiggin: Hon. Members will recall that when we took office last year we undertook both to reduce public expenditure and to find ways of cutting out inefficiency and waste in public business. As is known, the Prime Minister invited Sir Derek Rayner, in consultation with Ministers, to identify ways in which staffing and costs of administration could be reduced in their Departments. In the case of my Department a study of the capital grant schemes was undertaken and we have accepted in principle the recommendation that the existing grant schemes should be radically simplified and rationalised.
The main proposals include the abolition of prior approval, simpler tests of eligibility and new arrangements for claiming grant. Consultations on these proposals are currently in progress with the farmers' unions and other interested organisations, including those representing the staff concerned, who can offer advice on their practical application. When these consultations have been completed, a new scheme will be presented to Parliament before the House rises for the Summer Recess. This scheme will replace both the schemes being discussed tonight and the Farm and Horticulture Development Scheme, which implements EEC directives 72/159 and 73/268.
The report also suggested a rationalisation of the various rates of grant to be

paid under the schemes. This came on top of the speculation that has been evident in the farming press over the past few months about the way in which grant rates might be affected by the Government's determination to reduce public expenditure. My right hon. Friend decided that it was important for the industry to end this uncertainty and at the same time to take a step towards the rationalisation of grant rates recommended by Sir Derek Rayner. This is what the schemes before us do.
The schemes came into operation on 1 February 1980, the day after being laid before Parliament. This was considered necessary to avoid large numbers of preemptive applications being made, as happened on an earlier occasion when grant rates were varied after advance warning and about 100,000 extra applications came in during the last month before the grants went down. We were anxious to avoid a repetition, because it would have added to the cost to public funds and seriously disrupted the work of divisional offices, to the overall disadvantage of farmers. No discourtesy to the House was intended by this procedure and the continuance of the schemes is, of course, subject to their being approved this evening.
Let me now turn to the substance of the schemes. They make two main changes: they adjust certain grant rates and they introduce limits on grant-aidable investment.
Most grant rates have been increased. Under the Farm Capital Grant (Variation) Scheme, 18 rates go up and only six go down, while 11 remain the same. Under the Horticulture Capital Grant (Variation) Scheme, 15 grant rates remain the same and 15 go down. Under the Farm and Horticulture Development (Amendment) Regulations, 41 grant rates are increased, 22 are decreased, and 18 are unchanged.
What are the main changes? The basic rate of grant for buildings and works under the FCGS and the HCGS is now 22·5 per cent. Under the FHDS it will be 32·5 per cent. One effect of this will be to remove the previous discrimination against sheep housing, giving it a higher rate of grant. I am sure that this will be greatly welcomed by the industry, which has been pressing for this improvement for some time.
The rate of grant on water supplies and conservation has been increased to 22·5 per cent., which is in line with one of the recommendations of Sir Nigel Strutt and his committee in a recent report.
Assistance for dairy and cattle buildings is reduced to the 22·5 per cent. rate under the national scheme and 32·5 per cent. under the EEC scheme. They were given a higher rate in 1976 to encourage the better utilisation and conservation of grassland and economic milk production. We believe that in the present climate there is less justification for the advantage given in 1976, especially following three devaluations of the green pound and two increases in the milk price, which have benefited dairy farmers substantially.
It is for the same reasons that grants for dairy plant and equipment and equipment for the loading and unloading of silos, which were introduced in 1976, will no longer be available under the national schemes, though they will continue, at lower levels, under the FHDS.
We recognised that horticulture generally benefits less from price support arrangements than agriculture, so we have retained the grants on horticultural equipment at their present levels. Where grant on other forms of equipment has been reduced, it is worth remembering that this equipment benefits from the 100 per cent. write-off provisions in the year of purchase for income tax purposes. Farmers and growers outside the less-favoured areas will generally get 10 percentage points higher grants under the FHDS than under the FCGS. Inside the less-favoured areas they will enjoy a further five percentage points advantage on most items.
For field drainage we have not reduced grant to the basic rate for buildings and works because it would have reduced the amount of work undertaken to an unacceptable extent. Consequently, the lowland rate will be at 50 per cent. under the FHDS and 37·5 per cent. under the FCGS.
We are, of course, retaining the 70 per cent. grant for hill drainage in less-favoured areas. The 50 per cent. level of grant will also be retained on hill land improvements in recognition of the special natural handicaps with which they have to contend.
I should like to say a few words about the new limits. A substantial proportion of grant is going to a small number of applicants operating large enterprises. In the main, these applicants have benefited from the tax changes made by my right hon. and learned Friend the Chancellor of the Exchequer in his Budget, and so they will have a higher proportion of net income available for investment. We have therefore decided to impose a limit on the amount of investment that can qualify for grant.
Under the national schemes, the limit is 160,000 ECUs—about £100,000—on which grant may be paid in any six-year period. Under the EEC scheme—the FHDS—the limit is 220,000 ECUs, or about £136,000. We consider that this represents a reasonable level of investment for a family farm. There will be no retrospection. In applying the limits, no account will be taken of any expenditure on which grant has been claimed where the application for approval of that expenditure—whether under the national schemes or the FHDS—was received before 1 February 1980. These limits will apply in addition to the existing labour unit limit and applicants will no longer be eligible under the national schemes while they have a current development plan approved under the FHDS.
These limits will apply only to a relatively small number of big enterprises. Under the national schemes, only 1 in 100 applicants is likely to be affected over a six-year period. Under the FHDS we expect only about 20 per cent. of development plans to be affected, but two-thirds of the savings will come from only 5 per cent. of approved plans.
The limits and the changes in rates will produce important savings for the Exchequer, starting from about £4 million in 1980–81 and rising to an estimated £33 million in 1983–84. I emphasise, however, that these are straight-line projections. We shall keep a close watch on the trends in grant applications, the costs of which will depend on the use that farmers make of the schemes.
We have made these changes taking into consideration current events in farming and horticulture and the likely pattern of demand over the next few years. They are not immutable and, if


circumstances change, they may need further adjustment. We believe that the arrangements are in line with the present needs of the industry. They will ensure that the grant schemes will continue to make the important contribution to agriculture and horticulture that they have been making for over 20 years.
I commend the two statutory instruments to the House.

Mr. Gavin Strang: In his opening remarks the Minister stated that these changes are a consequence of advice that the Government have received from Sir Derek Rayner. To the extent that they reflect increased efficiency and a reduction in administrative costs, the Opposition are able to support them. When I refer to a reduction in administrative costs, I mean that the administrative cost per £1,000 of grant paid is significantly reduced. I also assume that we shall not see a significant increase in the rate of abuse of the grant schemes as a consequence of these administrative savings. That would be counter-productive.
The Minister stated that 400 jobs will be saved as a consequence of these changes. I would be grateful if the hon. Gentleman would say whether these are the jobs of bureaucrats, if I can use that word. I do not use it in a derogatory sense. Are we talking about administrative staff who are based in Ministry offices, or does that figure include technical people, such as advisers, who go on to farms, especially where the horticultural development scheme is concerned? If that were the case, the Opposition would very much regret it.
From my experience in the Ministry, I know that agriculture is well served by its civil servants. I hope that the Parliamentary Secretary will assure us that we are not talking about redundancies there, either voluntary or compulsory, and that the savings will be achieved through natural wastage. At a time of high unemployment any other policy would be unacceptable.
The previous Labour Government laid great stress on the FHDS scheme. Although it was not supported by all sections of the agriculture industry, I believe that it was in the interests of

agriculture that the concentrated effort that the Agricultural Development and Advisory Service put into the scheme and the intensive attention received by many holdings that participated in a farm plan made a contribution to efficiency on those farms, which continued long after the end of the scheme.
What is the Government's attitude to the emphasis that we attached to the FHDS following a recommendation from the Public Accounts Committee? Our share of EEC expenditure on the FHDS was 9·8 per cent. in 1977, and it increased to 19·4 per cent. in 1978. That is a measure of the success that the ADAS achieved in increasing the take-up of the scheme, for which we receive EEC support.
I hope that the Parliamentary Secretary will be able to tell us whether the cuts involve a cutback in extension work or reflect a change in emphasis in relation to the importance of the FHDS compared with our domestic farm and horticultural grant schemes.
I turn to the grant changes announced by the Minister last month and elaborated on in detail, for which we are grateful, by the Parliamentary Secretary tonight.
It seems that there has been an attempt to dress up a significant cut in the level of aid for investment in agriculture as administrative streamlining. I recognise that the Government cannot give an accurate figure for the reduction in expenditure that will be achieved—it will depend on the level of applications for grants—but some estimates must have been made and I hope that the Parliamentary Secretary will tell us in more detail how much of the savings in public expenditure will come from cuts in manpower costs and how much will result from cuts in the level of support for farm investment.
Let us not be fooled by the Parliamentary Secretary's reference to the fact that more grants have been increased than have been decreased. He will be the first to acknowledge that that is not the important point and that what counts is the level of Government support for agricultural investment and how much less investment we shall get in this important and productive industry as a result of the changes.
Given that the Government wanted to make the changes, they have not made a bad job of it, with one or two important exceptions. We support the reduction in the limit. We cannot justify the level of support given to the large investments made in the industry. The Northfield report suggested that the economies of scale did not go much beyond 300 acres. Once we reached 500 acres, we would be talking about a pretty small achievement in terms of economy of scale.
We would support the amalgamation of much smaller units, but if we really mean what we say when we talk about more farms being made available for people to farm and let we cannot at the same time say that we want more and more farms amalgamated into large units of thousands and thousands of acres operated by farm managers.
For that reason, among others, I welcome the change. I also welcome the extent to which the Government have protected the horticulture industry from the changes. They have even achieved some small increases in relation to the level of grant for horticulture. I also welcome the fact that the Government have looked favourably on the position of the hill farmers—those in the less-favoured areas—and I very much welcome the Government's announcement that they are to increase the rate of grant for sheep housing.
I hope that we will see—though it is taking rather a long time—a thriving lamb industry in due course and one in which we develop a significant and sustained trade in exports to the Continent.
I turn to the specific changes that I believe are reprehensible. First, I regret the cut in the level of support for drainage in marginal and lowland farms. Those who have had any involvement with agriculture have always taken the view that perhaps the most important and most basic investment to be made on the land is in drainage. For the Government to single out drainage for a sharp cut in support is, I believe, a mistake and is against the interests of our agriculture industry.
Secondly, I regret the reversal of the Labour Government's policy towards the dairy industry. Of course, we are opposed to the monstrous misuse of resources

implicit in the surplus of milk in the European Community, but we have always argued that because of the relative efficiency of our industry it should be enabled to increase its share of the total Community production. Indeed, when we looked at the benefits to agriculture from selective expansion we found that the one commodity that emerged as the most cost-effective for expansion was milk. I remind hon. Members—though they do not like to be reminded—that we achieved our projections in relation to food and resources.
One of the great success stories is the dairy industry, where we have almost squeezed out the imports of butter from the Continent. We support New Zealand imports and we hope that the Government will continue to insist on those imports in the context of the EEC discussions taking place on that subject. The industry has significantly increased its share of British consumption of dairy products. The 1976 package announced by the Labour Government was deliberately geared to achieving that.
I think that it is regrettable, therefore, that there is now a clear reversal of that approach. We fought and fought against the EEC attempts to prevent us encouraging our own efficient dairy industry. Now the Government, in the words of the NFU, are capitulating, as it were, before the real arguments begin about the EEC's approach to this issue.

Mr. Geraint Howells: I am sure that the hon. Member for Edinburgh, East (Mr. Strang) is aware that we produce only 35 per cent. of the butter required by this country. There is, therefore, a great deal of room for expansion of home production, and it is up to us to give a lead to the dairy producers.

Mr. Strang: I would not wish to comment on the precise figure quoted by the hon. Member for Cardigan (Mr. Howells). I think that it is probably rising, but I certainly agree with him that there is scope for expansion.
This is the first opportunity that we have had to debate the effects on agriculture of the Government's expenditure cuts. I do not want to put the problem out of perspective. Compared with other savage expenditure cuts, the agriculture cuts are small beer. The expenditure cuts on rural bus fares and school milk


are more important to the farming industry. Awesome consequences are implicit in the Government's disastrous economic policies. They are going further towards a tight money policy. I hope that they will not make the mistake of cutting the agricultural advisory service and research capability, which have played an important part in the successful and expanding industry.
The right hon. Member for Lowestoft (Mr. Prior) is remembered in the industry and in the Ministry for the enormous damage that he did to the agricultural advisory service. It took many years to recover. I hope that another Conservative Government will not undermine the agriculture industry while saying that they support it. We do not intend to vote against the proposals, but we hope that the Government will not repeat their past mistakes.

Mr. Peter Mills: I welcome the opportunity to take part in the debate, because the grants are of immense importance to agriculture. Over the years they have served British agriculture well. Far more important, they have served the consumer well. Enormous quantities of food have been produced in Britain, and the amount is still rising.
I understand and approve of the reasons given for administration cuts and the savings that the Government are seeking to make. If the hon. Member for Edinburgh, East (Mr. Strang) were fair, he would accept that agriculture has come off lightly. At a time of crisis and difficulty, and when housekeeping has to be pruned, the Minister has helped to ensure that the cuts are minimal. In such a time of crisis each section of the community must suffer cuts. The agriculture industry should congratulate the Minister.
When there is a great surplus of milk, it is difficult to see how one can give large grants to increase milk production. One could debate that issue on its own. I understand why the Government have made a cut in that grant. I applaud the overall limit. It is wise. I applaud the Government for their decision on sheep housing. There is no doubt that many lambs can be saved by housing ewes. The profitability of sheep

production depends on a high lambing rate. In present times, with the problems in the sheep industry, to make it possible to save lambs and increase profitability through better housing is a wise step forward. I am sure that that will be welcomed in the more remote and difficult climates.
Having welcomed the Government's proposals, I turn to some criticism of them, which is right and proper. While I applaud most of the new rates, I am unhappy that higher grants were not included for the marginal land areas. Before my hon. Friend the Minister shoots me down, let me say that I am asking not for a greater total sum but for an adjustment to ensure that the marginal lands can be improved.
We wish the marginal lands to receive the sort of grants received by the less-favoured areas. I am not talking about hill cow subsidies or sheep subsidies: I am talking about proper drainage, the renovation of grass, and fencing.
I am sure that my hon. Friend the Minister recognises, and that the House recognises, that if we want increased food production—we are producing about 70 per cent. of our primary needs—it must come from the poorer land. We need better drainage.

Mr. Paul Hawkins: indicated dissent.

Mr. Mills: My hon. Friend the Member for Norfolk, South-West (Mr. Hawkins) represents a wealthy and prolific area. If we wish to increase production and help with the social and rural problems of the remote areas, it is important to consider the marginal land. It would benefit the nation and the balance of payments. That is why high grants are important for the better drainage of land and grass regeneration.
There are thousands of acres in Wales, the South-West of England and other areas that could be helped in that way. I hope that a little help and aid will be provided in the manner that I have suggested.
It is important that one puts ones money on a success story. British agriculture is a success story, unlike many other industries at present. The grants help to maintain that success story. In the next few years, through the world


recession and all the problems that I am not allowed to discuss tonight, I ask the Government to put their money where there is success. That will increase production, to the benefit of the nation. That production will come from the marginal areas. The achievements through the grants over the years is an object lesson in how to encourage and promote agricultural production.
My hon. Friend the Minister can rest assured that I fully support the Government, but they must turn their attention to the marginal land.

Mr. Stephen Ross: I shall confine my remarks to the horticulture grant scheme. I wish to query the need to include any grants at all, at this time, for glasshouse growers. By so doing, surely the Government are encouraging growers to invest further in an industry which, to my great regret and to the country's eternal shame, is facing imminent bankruptcy. After all, generous grants and subsidies in the 1960s enticed many horticulturists to my constituency and elsewhere in the South of England. Some of them are household names for quality. I mention only Stevens and Rockford. They invested huge sums in acres of glass. They now face almost total gloom.
Things were bad enough in 1974–75, when the first of the oil price rises hit us. Most of the growers, by changing crops—unfortunately, turning from growing lovely roses and carnations to the growing, and increasing too much the growing, of tomatoes in this country—shedding labour and changing to other heating methods than oil, for which they had been given grants, managed to survive.
The situation now is almost beyond contemplation. Oil prices have risen 24p in five months. Presumably, if the announcements by Shell and BP of a day or so ago are anything to go by, more increases are on the way.
The average price of oil to a horticulturist is 46½p a gallon. In some circumstances, according to the grade of oil, it can be 57p a gallon. The Dutch equivalent in gas terms is said to be 19p. In 1978 growers in my constituency received

£440 per tonne for tomatoes. In 1979 the price was down to £383 per tonne. Goodness knows what it will be this year. The Dutch dump their surpluses in this country, much to our detriment.
Bank loans in Holland are available at 9½ per cent. or 10 per cent. In other parts of the EEC, I understand that they are even cheaper. In this country they are 20 per cent. and more. It is estimated that the Dutch grower has an advantage over the British grower of £10,000 per acre. A local grower told me recently that during the past 12 months his costs per acre had risen from £13,092 to £22,912. Growers will not survive for very long in such circumstances when returns are going down.
I put this question fairly and squarely to the Minister: do we want a glasshouse industry? I believe that we do. I want our growers to survive. If so, they should be allowed to compete on equal terms with our neighbours in the EEC. That means providing greater help than is available in these schemes. If the answer is "No", would it not be honest to say so without prevarication and not to offer grants but to substitute reasonable compensation to pull down what was erected with such confidence only a few years ago?

Sir Graham Page: The House will have noticed that on the Order Paper there are little rubrics under both schemes stating that the Joint Committee on Statutory Instruments has reported them to the House. The Chairman of that Committee is in his place tonight and I am sure that he will support the comments that I want to make on this subject.
I wish to comment not on the merit but on the form of the schemes. The Farm Capital Grant (Variation) Scheme 1980 amends the 1973 scheme. It is the fifth complicated amendment. There are now five new schedules to the scheme and innumerable new paragraphs and subparagraphs. Obviously the scheme is ripe for consolidation and should have been consolidated to make it easy to understand.
The Ministry's answer to the requests from the Joint Committee for consolidation was that it was not possible to consolidate with amendment because
the shortness of the interval of time after the taking of decisions on the financial limits and before the making of an announcement made it necessary to keep the amending statutory instruments as simple as possible.
That is the most amazing saying of the week, if anybody thinks that the wording of this instrument is simple.
The only decision that had to be made was on the financial limits. That decision was made on 24 January and the scheme was laid on 30 January. All that was involved was the insertion of a figure in blanks in the scheme. Surely the Ministry knew what was going to be required. It was recommended by Sir Derek Rayner. I appreciate that that is not a popular name to mention in the House at the present time. However, the scheme could have been drafted long before January and the blanks could have been filled in. It could have been drafted as a consolidation measure.
The failure to consolidate it is blamed on lack of time, because the decision was made at a late date. The decision was only a matter of filling in blanks. It is wrong that Parliament has to accept what I would call—with all due deference to my hon. Friend the Parliamentary Secretary—a piece of second-rate draftsmanship by his Department. It is second-rate draftsmanship. The language in the new provision in paragraph 8 (3) is incredible. It is ungrammatical, unintelligible and extremely obscure. What is the Department's answer to that? The answer is that it did not have time to draft it properly. We should not be presented with a measure that the Department has not had time to draft.
The House, in dealing with primary legislation, spends a great deal of time on the Committee and Report stages of a Bill in trying to get it right. We do not have the opportunity to do that with secondary legislation. That is all the more reason why it should be meticulously drafted. In this case there is difficulty in understanding the drafting. That is bad. It is secondary legislation, but it need not be second-rate legislation. It is a pity that this measure is so badly drafted, because it has great merits.

Mr. Bob Cryer: I certainly endorse the remarks of the right hon. Member for Crosby (Sir G. Page), although he will not expect me to support him on the merits of the measure, because I take exception to the variation of grants. I shall detain the House only briefly, because the right hon. Gentleman has put the case succinctly.
It is totally wrong for civil servants to attempt to convince a Select Committee that haste and shortage of time are justifiable reasons for bad draftsmanship. There is great confusion in the new subparagraph (3)( a)(iii) in paragraph 9.
The Committee pointed out in its memorandum to the Department that consolidation was a desirable aim. The Department said that it would bear that in mind. There is no reason why it could not have given a clear commitment to the Committee that on the next occasion it would consolidate.
This may be secondary legislation, but people use secondary legislation. It is as binding as primary legislation. It is important that legislation of this sort, which binds our citizens and which places restrictions and opportunities upon them, should be as clear and unambiguous as other legislation. The function of the Joint Committee on Statutory Instruments is to try to draw the attention of the House to difficulties and ambiguities that arise. We have drawn the attention of the House to those points. Hon. Members should realise that this legislation goes out in the name of Parliament, and it behoves all hon. Members to put pressure on Government Departments to ensure that the Committee works effectively by producing an effective response to the reasonable requests of the Select Committee which is working for the interests of citizenry as a whole.

Mr. Marcus Kimball: In introducing the scheme, my hon. Friend the Parliamentary Secretary said that we are going on with the farm capital grant scheme and the farm and horticulture development scheme with the amended rates of grant from August, and that the Government would then come before the House and bring forward an entirely new scheme.
I certainly do not agree with the praise heaped on the farm and horticulture development scheme by the hon. Member for Edinburgh, East (Mr. Strang). I hope that we shall have a new scheme arising out of the orders in August. However, certain matters should be borne in mind. The scheme has completely destroyed the market in second-hand farm machinery because of the artificial 15 per cent. grant given for buying new machinery. In exchange for a guidance premium of about £6,000 on a large scheme, the farmer ties himself up for six years. Even in the good land of Lincolnshire, people have come to me and said "We have to go to ADAS to complete our scheme. The chap who completed the scheme told us to shove every possible thing in that we might want to do, and now we cannot afford to carry it out and we want to amend the scheme." The documents that are necessary to amend the scheme are frightening.
I have never taken up a farm and horticulture development scheme because I have always felt that the farm capital grant scheme was, taken with the tax concessions—provided that one is making a profit on capital development—sufficient. Many people have rushed into the farm and horticulture development schemes and are regretting it.
One of the disasters of the countryside today is the money that has been wasted on capital grants, particularly on marginal land improvement. People have the carrot of the grant and are persuaded by estate agents—who are the biggest niggers in the woodpile—people selling fertilisers and so on to buy an estate for more than they can afford. Then, the estate agents get the commission when the estate is sold to somebody else and they go through the same racket all over again. The worst money that has been spent by the taxpayer in this area is on the improvement of marginal land. Marginal land is a long way above sea level, it is cold and it is in high rainfall areas. People believe that they will be able to turn beautiful heather into green grass. They will not, because they are not prepared to maintain it. They get the orginal grant, and six years later the land has all gone back to rushes and the chap is about to sell up to the Forestry Commission.
The best thing to do in many marginal areas is to leave the water on the land.

There are many other assets apart from agricultural ones in such areas and the last thing that we want to do is to increase the run on marginal land. That is what has destroyed fishing and other amenities in the areas. I hope that, in the new scheme, the Minister will look carefully at the use of taxpayers' money. I believe that the grants in many of these marginal areas are distorting the areas to the disadvantage of the taxpayer.

Mr. John Home Robertson: I am worried by some of the remarks made by the hon. Member for Gainsborough (Mr. Kimball). He appears to be suggesting that we should not be carrying out improvement schemes and that areas should return to moorland. Indeed, that will happen if we do not go ahead with the drainage of large areas of the country.
I would not normally be here at this time of night speaking on such schemes, but when I heard that the proposal arose from something that had been put forward by Sir Derek Rayner, and knowing his ideas about streamlining and his suggestions about rural sub-post offices, I felt that I should come along and at least listen to the debate.
In opening the debate, the Minister said that he had streamlining in mind and intended to make substantial savings. Indeed, he quoted substantial savings to the taxpayer, which must be a good thing. However, I am concerned that we are not just talking about administrative streamlining. Indeed, the Minister has brought with him no fewer than nine civil servants to back him up on the occasion of this debate. I suspect that it is perfectly obvious that all these cuts and substantial savings will be at the expense of giving practical advice to farmers and at the expense of investment.
My hon. Friend the Member for Edinburgh, East (Mr. Strang) was right to emphasise drainage. The Minister is a practical farmer. Indeed, I should have declared an interest, as I am also a practical farmer and I claim these grants from time to time. The Minister therefore knows as well as I that huge acreages were drained 100 to 200 years ago. Those drainage systems are collapsing and failing all over Britain. Anyone who has travelled up and down the country by


train—as I do twice a week—will have seen the amount of high-quality arable farm land that has been standing under water for most of the winter. Our drainage schemes do not function as well as they should. The only way to overcome that problem is to redrain the land. The Minister knows that the capital costs—

Mr. Wm. Ross: The hon. Gentleman has missed one of the most important points relating to drainage 100 years ago. He has not pointed out that those drainage systems were built for horses. We are now a long way from cultivation by horses. That is one reason for the deterioration in drainage.

Mr. Robertson: I accept that point. However, that does not detract from the fact that many of our drainage systems fail as a result of the physical effects of machinery or from sheer old age. The Minister knows how much it costs to drain an acre of land these days. He knows also that costs are rising. In addition, interest rates on farm overdrafts have never been higher. It therefore stands to reason that the cut in the rate of grant for drainage will substantially slow down the rate of replacing old drainage systems. I hope that the Minister will reply to those points.
The Minister has told us about the new ceilings on the levels of investment qualifying for capital grant assistance. I agree with that principle. There is no point in backing up the most prosperous enterprises with taxpayers' money all the time. However, many major arterial drainage schemes involve large areas and, therefore, groups of farmers. They might exceed the ceilings mentioned. A great amount of investment may be involved, for example, in draining several square miles of land and deepening a main watercourse. Many of the schemes that now receive grant assistance might exceed the ceilings and thereby be inhibited. Perhaps the Minister will comment on that.

Mr. Richard Body: I shall add yet another discordant note. I do so with some regret as I realise that the Government's intentions are an improvement on those of their predecessors.
These measures are incomprehensible. I can only assume that they are part of the conspiracy to prevent peasants such as myself from being included in the scheme. If one is to get in on the act, one must be a substantial farmer. One must have an accountant and be on good terms with ADAS. One must be a different type of character from the man who needs Government aid.
It is most regrettable that, with every year that passes, thousands of small farmers and smallholdings disappear. In my constituency, in the fairly short time that I have represented it, not less than 3,000 small farms and smallholdings have gone out. Our structure of farming has changed considerably in the past 20 years.
Throughout most of the countryside, we see larger and larger farms. There are fewer and fewer opportunities for the small farmer, particularly if he happens to be a tenant, and, most of all, if he is the tenant of a poor landlord. We have fewer opportunities for the go-ahead farm worker to get a few acres of his own and establish himself. That is a sad fact, especially when we realise that so many of our most able and distinguished farmers today are the sons or grandsons of farm workers or small farmers.
The opportunities for the young man to enter farming become fewer and fewer with each year that passes. I am driven to the view—and perhaps one day my hon. Friend the Minister will agree—that the present system of grants, subsidies and tax allowances is actively working against the small farmer.
My hon. Friend the Member for Gainsborough (Mr. Kimball) touched upon the question of second-hand farm machines. All of us who are acquainted with agriculture know of their importance. I endorse every word that he said.
I speak with some feeling. If I may declare an interest, I have a holding that I let to a youngster who tried to get going with a limited amount of capital. He will now have to give it all up, because he cannot get going with the unfair corn-petition created by the present system—above all, by the system of tax allowance. I know that I shall be out of order if I say more about that. It is all part of the system of grants and subsidies that makes large farms still larger, makes it


increasingly difficult for the small farmer to get going and makes it impossible for the youngster to get into agriculture.
It will weaken agriculture in the years to come. It may be all right for 10 or 15 years, but, if in future years agriculture is to be healthy, we need new blood. The system is acting against that. I greatly regret it.
We are making a grave mistake in continuing such schemes. Far be it from me to say that what goes on on the other side of the Channel is better. However, over there it is infinitely easier for a young man who wants to get into agriculture. He can get credit and establish himself. It is quite different over here. If we are to have a system of State-supported agriculture, I hope that the Government will look at schemes in Holland and France. They are much more advantageous for the young man and the small man and infinitely better for the future of agriculture.

Mr. Wm. Ross: I did not intend to speak in the debate but am prompted to do so, having listened to what has been said. My farm will be affected. I declare an interest. I am a farmer, and one who has made himself popular with the Minister in the past fortnight. I have just applied for a drainage grant and my late application has saved the Minister £1,000. I do not doubt that there will be many other farmers in that position.
It may not be a serious financial matter for me, but it should concern hon. Members who are worried about farmers, and especially smaller farmers. Such a sum on a relatively small drainage scheme is a considerable amount from the net income of a small farmer.
I have recently read articles in the farming press regarding the matter. I am sure that the Minister is aware of the concern that is being expressed.
I intervened during the speech of the hon. Member for Berwick and East Lothian (Mr. Robertson) to draw attention, in a somewhat back-handed way, to the damage that has been done to the farming structure in many parts of the country by heavy machinery. The effect is increasing and must be stopped. That will cost an enormous amount of money.
I, too, welcome the provision of sheep shelters, but I think it draws attention to another difficulty which is very largely peculiar to the farming industry, that of providing, sometimes at very high cost, machinery and facilities on the farm which have a very short period of use. The sums which must be expended on them are, therefore, far greater in relation to their use than would be the case in any other industry in this country, where a machine is usually installed and used almost continuously. A modern combine harvester, for example, can cost well over £30,000 and be used for six or eight weeks a year; the rest of the time it sits rusting in a corner of the farmyard, because if the farmer wants to put it under cover he has to put up a large building, worth several thousand pounds, to hold it. This aspect of farming is not understood outside the industry. It is a very serious aspect and one which the capital grants system has gone some way to meet in the past; it is now less and less successful in doing so. I hope that Governments of all parties will keep this in mind in the future.
Paragraph No. 8 of the schedule says:
Provision or improvement of farm flood protection works; protection or improvement of river banks.
We all realise that most large watercourses and many small ones are protected by the Department of Agriculture; this is certainly so in Northern Ireland and I have no doubt that the same general situation exists over here. What I cannot understand in that particular paragraph, however, is the fact that in the more favoured areas the percentage grant is only half of what it is in the less favoured areas, because if there is a single case in all this schedule where the situation should be reversed, it is here. The further one goes downstream, the larger and more destructive it becomes. This is something that the Minister should re-examine.
The hon. Member for Gainsborough (Mr. Kimball) mentioned estate agents. I regret that he did not include bankers in his strictures, not because of their tightfistedness but rather because of their unfortunate open-handedness whenever farmers—very often neighbouring farmers —are going to bid for the same piece of property. I believe that the willingness of bankers over the last few years to provide very large sums of money will


cost the farming community dear. It has already cost many individual farmers dear and may, indeed, drive them out of farming altogether before they are many years older.

Mr. Cohn Shepherd: Whilst listening with great interest to the opening remarks of the hon. Member for Edinburgh, East (Mr. Strang), I could not help reflecting on the fact that, as an incoming Government, we were left with £3,000 million of expenditure committed but not funded. It is not surprising that this Administration have had to scratch around hard to find the ways and means of beginning to make ends meet. The fact that the cuts involved in this particular measure amount to a mere £4 million next year indicates a very successful degree of advocacy on the part of my hon. Friend the Minister and his team, to whom the industry has cause to be grateful at present. It is well recognised that pump-priming in agriculture has done well in the past. We should remember that when thinking of the future.
The package that we have before us makes clear that the Government have made the best of difficult circumstances. I am sure that the Government look forward to the time when they can be more helpful. A number of hon. Members have been destructively critical. It is easy to be critical. It is easier to be critical than constructive. I have observed that in reading the press and noting the comments by the industry.
However, I congratulate the Minister on what he has achieved. The basic decision to spread the available funds across the broadest base by placing a ceiling on investment limits is a correct one. I think that it will commend itself to my hon. Friend the Member for Holland with Boston (Mr. Body). It makes it possible for the resource to be spread across the widest possible base of applicants.
It is significant—it has been decried by some—that the Minister's decision has made it possible to increase more grant-aid rates than have been reduced. There is a fundamental restructuring of grant-aid rates which will be advantageous in the long run.
I come from an area which is much dependent upon agriculture and horticulture activity. I welcome the steps that have been taken to protect grant rates in the less favoured areas and the higher grant rates for sheep housing. These measures are especially welcome to one Shepherd in particular. In view of the rough time that horticulture has been experiencing in my area, the retention of the level of grant aid on horticultural equipment will be well received. I noted with especial pleasure the enhancement of the orchard grubbing-up rates under both the Farm Capital Grant (Variation) Scheme and the Horticulture Capital Grant (Variation) Scheme.
The decision to reduce the lowland field drainage rates has inevitably attracted its share of criticism. It is probably the most heavily criticised feature of the package. It is an easy one to go for. It is easy to argue as well that as there are about 7 million acres of food-producing land still in need of drainage it is a false economy to choke off land drainage by reducing the amount of grant aid.
I wonder how the rate of investment in land drainage has progressed over the past few years. If there are 7 million acres still to be dealt with, what progress has been made over the past five or six years? Will that progress be adversely affected by a drop-off in the rate of grant aid? Are there other considerations that have led landowners not to invest in land drainage? Bearing in mind the time that land drainage grant aid has been available, there should be substantially less than 7 million acres yet to be drained.
I reinforce the comment of my hon. Friend the Member for Devon, West (Mr. Mills), who spoke of the need to sustain the rural balance and to recognise the contribution that marginal land can make. I am not in agreement with my hon. Friend the Member for Gainsborough (Mr. Kimball). I shall be delighted at a time of his convenience to take him to certain parts of my constituency which would benefit greatly from recognition of the status of marginal land, land which would be helped along by the sort of assistance that can be given to less favoured areas.
I am perturbed about the way in which the population is leaving the land and about the way in which the land is falling


back because of its nature and geography. It can, as it has in the past, contribute to the structure of the countryside.
There is one area of grant aid about which I am confused. It does not appear in the comprehensive list of changes published by the Ministry. It relates to the poultry sector. In my constituency I have many poultry enterprises producing both eggs and broiler fowl. In the poultry sector itself there appears to be an element of confusion about whether it is considered to be agricultural or industrial. The fear is that poultry farmers will be forced to drift away from agriculture and be treated as an industry. I ask the Minister to tell us where the poultry sector fits into the grant structure.
The Government are on a hiding to nothing when they make changes aimed at speeding up and simplifying the procedures for obtaining grant aid. The changes made are to be welcomed. I do not doubt that a farmer embarking on a project of investment will take advice before irrevocably committing himself to heavy expenditure. The process of taking advice will be far quicker than the cumbersome process of submitting plans and awaiting approval against a climate of increasing costs. The opportunities available to the farming industry are widened.
Once again I reinforce the remarks made by my hon. Friend the Member for Devon, West. It is a good thing if the Government will back a good industry, and British agriculture has shown itself capable of responding to this backing. We are approaching 70 per cent. self-sufficiency. We can go a lot further, and we must bear that in mind at all times.

Mr. Paul Hawkins: I entirely agree with the way in which my hon. Friend the Parliamentary Secretary has produced the grants. He has done the right thing with the exception possibly of drainage—though it is not an enormous cut.
I agree with the hon. Member for Iondonderry (Mr. Ross), who referred to grants for river banks on marginal land being at double the rate of those for land which is presumably good productive land. It seems senseless. It does not

matter if washlands and old grasslands are flooded during the winter months, but it does matter if the banks alongside rich arable land are damaged. I hope that the Government will bear that in mind in future.
I totally disagree with the remarks made by the hon. Member for Edinburgh, East (Mr. Strang) about my right hon. Friend the Member for Lowestoft (Mr. Prior). I served with my right hon. Friend as his Whip and he was one of the best Ministers of Agriculture, Fisheries and Food this country has ever had. When he came to office he had to introduce, for the first time in the history of this country, a special review of agriculture. He was praised by all concerned with agriculture.
I want to say a word about what was said with such eloquence by my hon. Friend the Member for Holland with Boston (Mr. Body) regarding small farms. In my area I am losing farmer after farmer to big combines of merchant banks which run farms for merchant trusts. We want City money in agriculture— City money has always been involved in agriculture. But the amalgamation of farms and the buying of up to 60 or 70 acres means that some of the best fenland is being farmed by people who do not live in the area. Villages are dying, and we should look into this matter.

Mr. Anthony Nelson: I wish to confine my brief remarks to the Horticulture Capital Grant (Variation) Scheme. The problem with Sir Derek Rayner's remit is that it is all very well in general but open to criticism in particular. To some extent I am no exception in this case because in my constituency I have a considerable horticulture industry, rather like the hon. Member for Isle of Wight (Mr. Ross).
As I understand it, this scheme varies the grant scheme of 1973 by reducing the amount of grant and reducing the total expenditure in the cases in which expenditure can be approved. From my hon. Friend the Minister's comments it would appear that 15 of the grants will remain the same but 15 will decrease. Thus, the position for horticulture will be rather the worse as a result of these statutory instruments.
The horticulture industry in my constituency is concerned predominantly with the growing of tomatoes, lettuces and flowers, and very serious difficulties have been faced by independent growers and the tenants of the Land Settlement Association in recent years, mainly as a result of rising costs—particularly of oil, wages and interest—and the poor returns during the last year. This has been particularly so with tomatoes, where there were an over-supply and low prices caused by late ripening and increased competition.
The severe situation in the horticulture industry is quite clear from the "Agricultural Review" which was published recently and which states that the area devoted to horticultural crops in the country has reduced from 289,000 hectares in June 1978 to about 277,000 hectares now.
Unlike the hon. Member for Isle of Wight, I do not blame for the problems faced by our horticulture industry on the setting up of these grants in the first place. The industry's problems are a result of increases in costs and current difficulties rather than the existence of this grant scheme. In my view, the grant scheme has been an important source of assistance to those entering the industry or expanding their businesses.
Finally, I should like to put a couple of quick questions. Will my hon. Friend the Minister indicate, either in his winding-up speech or in a letter, the impact of the changes proposed in the Horticulture Capital Grant (Variation) Scheme on particular sectors of horticulture? Which sectors does he feel will suffer most, and which will fare best under the proposed changes?
Secondly, what will be the impact on some of the larger and more economic units which are very important employers of my constituents and which are very much the trend in areas such as mine where the horticulture industry thrives? Although some large growers have benefited from the Chancellor's Budget measures, many horticulture businesses are owned by companies whose position was not substantially changed by the Budget and will be adversely affected by these measures. With those limited reservations I nevertheless welcome the changes proposed and the streamlining of the

administration, which, I hope, will improve some of the administrative delays experienced recently.

Mrs. Elaine Kellett-Bowman: I could not disagree more strongly with my hon. Friend the Member for Gainsborough (Mr. Kimball). It is most certainly well worth while improving marginal land, as my hon. Friend the Member for Devon, West (Mr. Mills) said. If it reverts it is because he is under-stocked, and that is so because the income from the land is not sufficiently high.
The aspect that I wish to criticise most about this scheme is the reduction in the land drainage grant for the lower land. After all, as one marginal land farmer said to me the other day, "We have to take the blooming water from the hills and then we have our grants cut for doing so." It is these people on the in-between land—neither lowland nor the hill land—who have been greatly helped by the increase in the compensatory allowances. It is the men in between who are suffering now, and it is absolutely essential that they should have a scheme for marginal land and that the money they previously received should not be reduced.

Mr. Nicholas Winterton: I shall be brief. I think that we have heard four very useful contributions to this short debate tonight. I refer particularly to that made by the hon. Member for Londonderry (Mr. Ross). I have had the pleasure of visiting his home and I know his farm very well. I think that it is rather sad that this order may well rob him of £1,000 which he might otherwise have received by way of grant aid. If there is any note that he can pass to me between now and the end of the debate which might rectify that situation, I hope he will do so, and I will try to ensure that he gets his just desserts.
I should also like to refer to the remarks that the hon. Gentleman made, taken up by hon. Friends on the Government side, about the grant aid for protection against flooding and erosion. The hon. Gentleman made an important point. I hope that my hon. Friend, in replying to the debate, will refer to that matter.
The remarks of the hon. Member for Isle of Wight (Mr. Ross) were pertinent. We have to make a decision about whether there is a future for our horticulture. The industry is being severely undermined in practically every quarter. There is scarcely a commodity produced by the industry that is not likely to disappear unless the Government take positive action. The speech of the hon. Gentleman, fully supported by my hon. Friend the Member for Chichester (Mr. Nelson), merits more comment than my hon. Friend on the Government Front Bench accorded it in his opening remarks.
My hon. Friend the Member for Holland with Boston (Mr. Body) made a useful comment. As we have heard in the debate, the name of Sir Derek Rayner is not the most popular in the House at this time. I believe that if the Government pay attention to every recommendation made by that learned gentleman, our villages will empty and our countryside, as a living area, will disappear. I hope that my hon. Friend will tread carefully in seeking to implement any of the recommendations of that particular bureaucrat, whose understanding of the countryside appears to be very limited. I am referring not merely to the recommendations now before the House but also to those discussed yesterday relating to the importance of post offices.
I should also like to refer to the useful comments of my hon. Frend the Member for Devon, West (Mr. Mills). His reference to marginal land was pertinent. We produce only 70 per cent. of what could be produced. Our farming industry, by using and draining marginal land and being given every possible assistance, would be aiding this country, its people and its food requirements, and the industry itself. I hope that the Minister will pay full attention to the comments of my hon. Friend and give credit to the remarks of a farmer who has great experience in what is perhaps a marginal area of the United Kingdom.

Mr. Wiggin: I think I should start by dispelling a misapprehension among some hon. Members. This is the first leg of a double. These measures refer specifically to changes in certain grant rates and introduce limits on grant-aidable invest-

ment. It was essential to mention the Rayner exercise in my opening remarks. We shall be coming again to the House before the Summer Recess with a new scheme—I am not allowed to use the word "consolidated" as it is altogether new—which will take account of the representations that have been made on the Rayner proposals and take account of this debate and some of the criticisms directed at the Government.
The hon. Member for Edinburgh, East (Mr. Strang) asked about economies in relation to staff savings. These changes tonight will not achieve any staff savings. When the new scheme is introduced, it is estimated that up to 400 staff will be saved between 1980–81 and 1983–84. These will comprise 250 administrators and 150 professional ADAS officers. It is not possible to apportion the savings to individual measures or to say how any particular function will he affected since consultations on procedures under the new scheme have still to take place. We are hoping, however, that over the three-year period natural wastage will deal with the problem.
The hon. Gentleman also asked whether the figures for savings include manpower. They do not. As a rough guide, about half of the savings come from the new limits and the other half from adjusting the grant rates.
The hon. Members for Edinburgh, East and Berwick and East Lothian (Mr. Home Robertson) and my hon. Friends the Members for Hereford (Mr. Shepherd), Norfolk, South-West (Mr. Hawkins), Macclesfield (Mr. Winterton) and Lancaster (Mrs. Kellett-Bowman) all spoke about drainage. It is reasonable to say that that aspect of the alteration has attracted a certain amount of comment from the farming community, but it is worth remembering that we have retained the 70 per cent. rate of grant for the hills and have made only modest reductions in the lowland rates, from 60 per cent. to 50 per cent. in the EEC scheme and from 50 per cent. to 37½ per cent. in the national scheme.
The reductions were made in the interests of rationalisation, but we felt that it would be unacceptable to reduce the rates to the basic levels of 32½ per cent. and 22½ per cent. respectively, because it would probably have reduced the amount


of work undertaken to a more serious and, in my view, unacceptable extent. The rates remain well above average and we believe that they are still sufficient, given the great advantages of drainage, to continue to encourage that important improvement.
It is also worth bearing in mind that drainage grants have been available to the farming community for many years and it is not unreasonable to assume that, given the length of time that they last, a good deal of worthwhile drainage has already been effected, though opinions on that may differ.
The higher rates of grant for dairy buildings and equipment were introduced in 1976 to promote the better use of grassland, but we consider that after three years the measures have had time to accomplish the desired improvement and in the present economic climate there is, as my hon. Friend the Member for Devon, West (Mr. Mills) and others mentioned, less justification for that advantage.
Dairy buildings have therefore been given the standard rate of grant that applies to buildings for other purposes. The standard rate has been increased from 20 per cent. to 22½ per cent. Dairy equipment has been excluded for the same reason.
I thank the hon. Member for Edinburgh, East for his general welcome. We appreciate that, but I dispute his comments on Government expenditure. At the time of the election, the previous Government's expenditure plans were unacceptable to the then Treasury and would certainly have had to be modified. The hon. Gentleman knows that if there is one overriding complaint in the farming community it is the effect of rising costs and inflation on incomes. It must remain the Government's prime objective to deal with that problem. The changes are the agriculture industry's small contribution.
My hon. Friend the Member for Devon, West welcomed the modesty of the cuts. I shall not over-emphasise that, for fear that my hon. Friend from the Treasury may be listening. We do not believe that the cuts will be damaging. They are skilfully applied to different aspects of the industry in a way that will do the least

harm—and in some cases, such as sheep housing, considerable good.
A number of hon. Members have mentioned marginal land. The Government have declared their intention of defining marginal land under the EEC basis. It is a complicated subject and not wholly in order in this debate, but I intend to make a public statement in the not too distant future to expand on the Government's difficulties and hopes in the matter. I shall see that it is drawn to the attention of the hon. Member for Edinburgh, East.
On horticulture, I am deeply sympathetic to the problems of our growers faced with a relative difference in the natural resources available to them. The president of the National Farmers' Union is meeting my right hon. Friend the Minister on the subject within the next few days and my right hon. Friend the Secretary of State for Energy is to attend a conference of growers to talk about the problems.
The Government take the matter seriously. We have made clear that we shall listen to genuine complaints of unfair competition and we are naturally concerned to find out the facts, but it is not easy to find a practical solution to the problem.
I am contrite following the speeches of my right hon. Friend the Member for Crosby (Sir G. Page) and the hon. Member for Keighley (Mr. Cryer). We accept that it is difficult to understand the clause that we have included. It has not been drafted as well as it could be. We had to move quickly at a difficult time of the year and, therefore, although hon. Gentlemen did not accept the excuse, I can honestly say that it was genuine.
However, we believe that the point is still clear and that, no matter how hard it may be to understand, it will stand up in law. That, though, is not the point. We accept the criticism and the point will be dealt with in the new orders when they are laid in the summer. In view of the fact that it is temporary, I hope that hon. Gentlemen will accept that view from my Department.
I shall not get into the arguments deployed by my hon. Friend the Member for Gainsborough (Mr. Kimball), but I believe that if our grant had included the


removal of barbed wire and the construction of wooden fences and a little for laying hedges he would have been more welcoming.
The hon. Member for Berwick and East Lothian asked about arterial drainage. The expenditure does not count in Scotland towards the investment limit and in England and Wales it is grant-aided under different legislation.
The hon. Member for Londonderry (Mr. Ross) is right. I am afraid. He may well find himself not able to claim quite so much grant under these orders which apply to Northern Ireland, but I shall not join in his debate about credit tonight.

It being one and a half hours after the commencement of proceedings on the motion, Mr. DEPUTY SPEAKER put the Question, pursuant to Standing Order No. 3 (Exempted business).

Question agreed to.

Resolved,
That the Farm Capital Grant (Variation) Scheme 1980 (S.I., 1980, No. 103), a copy of which was laid before this House on 31 January, be approved.

HORTICULTURE

Resolved,
That the Horticulture Capital Grant (Variation) Scheme 1980 (S.I., 1980, No. 104), a copy of which was laid before this House on 31 January, be approved.—[Mr. Wiggin.]

CIVIL DEFENCE

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Cope.]

Mr. Robert Banks: I am grateful for this opportunity to raise again that profoundly important part of our national defence, namely, civil defence for the home protection of our people.
I am also grateful to my right hon. Friend the Home Secretary for his interest in this subject. He has undertaken to see what improvements can be made, and I hope, therefore, that this debate will be helpful in its advice and that the search for improvements will lead to a fundamental change from the policy inherited from the Labour Government.
The wisdom of such a change and the desire to reactivate civil defence is, I

believe, being expressed in the House. In 1968 civil defence was put into "care and maintenance" and the Civil Defence Corps was disbanded by the then Labour Government.
The world we live in today is very different—I regret to say—from the world situation 12 years ago. In the sixties we were able to rely on the tripwire strategy of a superior nuclear deterrent. Since that time the Soviet Union has substantially increased, and is continuing to increase at a higher rate than NATO, its military forces.
I remind the House of the cuts in our defence expenditure by the previous Labour Government and the dangers that they have brought. There is now an imbalance in conventional and theatre nuclear strength in favour of Warsaw Pact forces, and my right hon. Friend the Secretary of State for Defence has recognised and expressed concern about this situation.
Civil defence is part of a country's total defence. It is relevant to note the reports that Russia has a sophisticated civil defence organisation and shelter programme. I have here a book which is an English translation of the Russian handbook. Russian military expansion is now seen on an international scale, and unless it is matched by a NATO counterbalance of forces it will be used with further destabilising effects, bringing consequent risks to peace.
In essence, the present United Kingdom policy carried forward since the sixties provides a system for warning and monitoring nuclear fall-out with plans for an administrative governmental organisation run from 24 sub-regional headquarters. In the run-up to the attack phase, Cabinet Ministers would leave London and move to those headquarters.
Under this policy the public will be advised on what rudimentary steps to take for their own protection in their own homes and what stocks of food and materials to lay in for a two-week period. This advice will be promulgated by blanket coverage on television and radio and in the press, and the booklet "Protect and Survive" will be distributed to as many homes as possible. If the decision is taken in time, present plans allow 72 hours for all this to happen. I leave it to hon. Members to imagine the sort of


picture that such mobilisation would create.
I do not believe that it is a viable option to expect families and old people to remain in high-rise blocks of flats in the East End, the centre of Leeds or anywhere else when they are in a nuclear alert phase. "Protect and Survive" has to rely on the simple expedient of advising its readers to live under the kitchen table or something similar, suitably protected by mattresses and anything else to hand.
There have been reports that the document may be released from the secrecy which has protected it from the public eye. I hope that that does not happen, because I believe that the demand is for a more realistic approach and for advice to be published on how people can make adequate protection now for themselves at home or at least have the necessary materials at hand to do to. Action is needed quickly. I see no reason why a charge should not be made for such a booklet. Greater attention would be paid to the booklet if a charge were made. It should be on sale in post offices, libraries and other places.
There is an urgent need to advise companies to site computer and communications equipment in basements or as far below ground as possible, and to explain how such areas can be adapted to staff shelters. Such advise should be self-financing.
The booklet "Nuclear Weapons", published in 1956 by the Home Office, is extremely good at presenting the effects of nuclear weapons and describing the protective factors of buildings. However, it is more a technical journal for the expert than for the general public.
The time has come for a new commitment to civil defence and to a shelter policy. I have no doubt that the Government will not be faint-hearted in that commitment. It is essential that the public have a clear idea of what is involved and advice on what they can do. To implement a new policy, we need to know what underground structures already exist and how they can be adapted to provide shelter from both nuclear and conventional attacks. Local authorities should therefore undertake surveys in their areas directed by their emergency offices. That will, of course, require per-

sonnel, organisation and some finance. Manpower for the survey should be drawn from young, unemployed people, preferably under the aegis of the Manpower Services Commission. That would provide valuable and worthwhile experience for those young people.
Organisation and training could be strengthened with the help of volunteers. Some additional finance would inevitably fall on the 1980–81 budget. While the survey should be undertaken in stages, updating of communications and headquarters should preferably be undertaken as the areas are surveyed. Some of the costs could be met by increasing rentals for oil pipelines and storage facilities which are at present included in the present civil defence budget.
A policy to encourage people to keep higher levels of foodstocks in the home would reduce the needs and costs of national foodstocks. Could not some of the surplus EEC foodstocks, for instance, be brought here to offset our national stocks? At the same time, the EEC should be persuaded to adopt a civil defence strategy and a grant system. Machinery for co-ordinating the police, fire services, the military and the Departments at local government level should be reviewed. It would be a considerable advantage to appoint a civil defence commissioner in overall charge.
I have omitted much else that I should have liked to say. However, I know that some of my hon. Friends want to contribute to the debate. I have made suggestions which I hope will be regarded in the positive spirit in which they were made. I am most grateful to the Minister for coming to answer the debate. I am sure that he will be as anxious as I to ensure that we take the right action in time to save the millions of lives who will otherwise be at terrible risk.

Mr. Archie Hamilton: The likelihood of there being a nuclear war increases each year. We know that the Soviet Union dominates the world. Recent experience in Afghanistan proves that. It is prepared to exploit any weakness that it may find. The future of Yugoslavia is in question, which brings the problems nearer to home.
The advantage held by the Soviet Union is that it is on the attack while we are on the defensive. In a democracy it is harder to prepare for war. There is no doubt in my mind that the Soviet Union will use military means when it believes that that will achieve its aims at acceptable cost.
Britain is almost totally dependent on our nuclear deterrent. Unfortunately, our conventional forces are insignificant in comparison with the vast conventional forces of the Soviet bloc. Nuclear weapons will deter only if this country is prepared to use them. If the Soviet Union feels that we are not prepared to use them, the invasion of Britain may come into the category of an acceptable loss.
I believe that the Soviet Union is entitled to take the view that, as we have no civil defence worth speaking of, at the same time we have no wish to use our nuclear weapons and virtually no will to resist. Civil defence must be part of our overall defence strategy. As my hon. Friend the Member for Harrogate (Mr. Banks) has mentioned, it is part of the overall defence strategy of the Soviet Union.
A country that is prepared to protect its people from nuclear attack is more prepared to risk nuclear war. With civil defence increased dramatically in Britain, we would be immeasurably better defended.

Mr. Robert Atkins: I congratulate my hon. Friend the Member for Harrogate (Mr. Banks) on drawing attention to his pertinent subject. It is one of the most important subjects to be considered by the country at the present time. I wish to draw the attention of the House to early-day motion No. 377, which has been signed by 101 of my right hon. and hon. Friends. That is an indication of the keen desire on the part of the Conservative Party to restore the position of civil defence to what it was prior to its abolition by a Labour Government. I am especially keen that attention should be paid to the restoration of civil defence. The motion calls upon the Government to reconstitute the civil defence or some such similar corps.
In the event of conflict, an organisation such as that can contribute a great deal both in morale and in the work that it

can perform. For example, there is the decontamination of the water supplies. We have heard much, especially in an earlier Adjournment debate, about the threat of chemical warfare. Many people are not aware of what is required to decontaminate water supplies.
Equally, the guidance and support that can be given by a professionally trained corps, either in a voluntary capacity or controlled through local government or Whitehall, which is able to cope with the problems faced following a conflict would play a valuable part. It has done so in the past and it will do so in the future.
Whether that group of people comes under the Home Office budget or the Ministry of Defence budget is a matter that should be discussed further. As someone especially interested in defence, I think that it should come under the area of home defence, in the way that the defence of Britain should be considered by two Departments. Whether my hon. and learned Friend believes that it should be passed to the Ministry of Defence, or whether he believes that it can be coped with under his own Department, is a matter for discussion.
I find it especially worrying that the document presently in the hand of my hon. and learned Friend is not available to a wider public because a mere 5,000 copies were printed. It ought to be more widely available. I find it more than slightly frightening that Switzerland, whose representatives recently visited Britain, indicated tht its civil defence procedures were infinitely better than our own. They are masters of the neutral position. Defence of that country is dependent largely on the protection that it offers its citizens. It can stand up in a free world and maintain its neutrality.
Again, I congratulate my hon. Friend the Member for Harrogate on drawing this problem to the attention of the House. I hope that my hon. and learned Friend will give us an interesting and helpful reply which will give us faith in the defence of this realm through civil defence.

The Minister of State, Home Office (Mr. Leon Brittan): The House will be grateful to my hon. Friend the Member for Harrogate (Mr. Banks) for raising this important matter and for stating his views with characteristic clarity. The


House will also be grateful to my hon. Friends the Members for Epsom and Ewell (Mr. Hamilton) and for Preston, North (Mr. Atkins) for their contributions to the debate. I, too, am very glad to be given this opportunity to tell the House where the Government stand on this subject.
There can be no doubt whatsoever of the public interest in and concern about civil defence which has become apparent in the last few months. Hon. Members will be well aware of this concern from their own constituency correspondence. During the past seven weeks the Home Office has received over 200 letters from the general public on this subject. As my hon. Friend the Member for Epsom and Ewell pointed out, events in Afghanistan and Iran, among other places, have made it natural, and indeed inevitable, that concern about this matter should revive.
My right hon. Friend the Home Secretary has responded to this concern by speeding up the review of home defence arrangements—a review which he set in train before the current wave of concern and shortly after the Government took office. The outcome of that review will be made public in due course.
The review takes the present arrangements as its starting point. Under these arrangements the money available each year—some £22 million—is mainly concentrated in three areas: first, on maintaining the United Kingdom warning and monitoring organisation at a high level of efficiency and readiness; second, on maintaining a food stockpile; and, third, on grants to local authorities to help pay the cost of the emergency planning teams which are maintained by the county councils and the GLC to produce, in consultation with the district councils and other public bodies, the detailed plans required under the Civil Defence (Planning) Regulations 1974 in such important areas as emergency feeding and the care of the homeless. There is also expenditure on emergency communications networks and on small planning teams in certain Government Departments.
Starting with these arrangements, the review by this Government embraces the whole spectrum of home defence and involves virtually all Whitehall Departments. It starts by considering the threat and the assumptions we must make of

probability of attack, the nature of this attack, and the likely warning period. It will cover the important question of information to the public, including arrangements for a wartime broadcasting service. It will cover the activities of the United Kingdom warning and monitoring organisation, as well as the machinery of government in time of war. It will cover the roles of the police, the fire service and the ambulance service. It will deal with the arrangements for maintaining essential food and water supplies. It will cover hospital services, essential industrial production, and coal, gas, oil and electricity supplies. It will cover inland transport and the use of shipping and aircraft for carrying essential supplies. It will cover the policy for providing shelter and the controversial question of encouraging people to stay put in the face of a threat of attack, and the alternative policies of evacuation and dispersal and the associated billeting and feeding arrangements.
Finally, and perhaps most important, it will cover the vital role I have already mentioned played by local authorities in planning and in co-ordinating local arrangements, including the identification of solid buildings suitable for use as public shelter and the use of volunteers in this context. I have listed all these matters, because I think it is necessary to give the House an idea of the ground that the review will cover and of the large range of interrelated subjects to which any discussion of home defence must address itself.
I confirm that the review takes account of the likelihood of conventional war—that is, the use of aircraft and missiles armed with non-nuclear devices against selected targets in this country—as well as the likelihood of all-out nuclear war.
It is important to consider the relationship between civil defence and military defence, as my hon. Friend the Member for Epsom and Ewell pointed out. Our central military strategy is to deter attack by an aggressor, and civil defence contributes to deterrence. Indeed, it is essential that our civil preparedness should be adequate if the credibility of our deterrent strategy is to be maintained. Our military preparedness and our civil preparedness are therefore closely related, and we must make sure that the balance between the two is sensible and realistic.
But, of course, civil preparedness costs money, just as much as military preparedness. In recent years, the civil part of home defence expenditure has been running at the level of about £22 million a year. Up to 1968 the level in real terms was three times as high. In our review we ask the fundamental question of what is the right level of expenditure, both in absolute terms and in terms of what the country can afford now. That is a question which must be answered by anyone who advocates that more attention be paid to civil defence. Let there be no doubt about it—any significant enhancement of the state of our preparedness will cost money. The debate on this subject is not so much about what extra preparedness is needed as about whether the money can be found and, if so, at the expense of what other area of expenditure it is to be found.
I should like to pay tribute to my hon. Friend the Member for Harrogate on the substantial contribution which he and our former colleague Robin Hodgson made to the debate on these matters by the pamphlet called "Britain's Home Defence Gamble", which they produced in 1978. I was not then so concerned in these matters as I am now, and it fell to others to respond to that pamphlet. I have recently re-read it with interest, and I find myself in agreement with a good deal of it. One of its declared objects was to pierce the fog of ministerially imposed secrecy which the authors said had drifted over the subject. I am not, I hope, by nature particularly fog-bound, and I shall comment in a moment about dispersing the mist, if not actually lifting the veil.
The pamphlet talked of a lack of commitment to home defence, a lack of co-ordination between Government Departments and local organisations, a lack of achievement at district level, and a lack of equipment. Those are all matters to which we are paying attention in the review. The pamphlet also says that the Home Office has just under 400 civil servants engaged on home defence matters. The actual total is about 125, of whom 70 are at the Home Defence College, and 40 are in the United Kingdom warning and monitoring organisation.
A central feature of the public debate so far has been the attitude of the Government in making available to the public

material about the protective measures which might be taken in the event of an attack. In particular, attention has been focused on the decision of the Home Office not to publish, in advance of an imminent attack, the pamphlet entitled "Protect and Survive". This is not a secret pamphlet, and there is no mystery about it. It has been available to all local authorities and chief police and fire officers and to those who have attended courses at the Home Defence College at Easingwold. It has been shown to interrested Members of Parliament and to journalists. It has not been published, for the simple reason that it was produced for distribution at a time of grave international crisis when war seemed imminent, and it was calculated that it would have the greatest impact if distributed then. Only just over 2,000 copies were printed, and most of these have been distributed as I have indicated. Only a few copies remain. As my hon. Friend the Member for Harrogate said, the pamphlet needs to be updated and revised in some respects. I shall take careful note of what my hon. Friend has said in this respect. Once this has been done, we propose to publish the pamphlet by placing it on sale at about the time when we announce the outcome of our review. We do not propose, for the reasons I have indicated, to distribute it automatically and across the board to every household, but it will be readily available on sale.
I have already mentioned the Home Defence College at Easingwold and I should like to pay tribute here to the work of the college, and in particular of its principal, Air Marshal Sir Leslie Mayor. It is he, perhaps more than any other, who has sought to ensure over the years that all those with civil defence responsibilities who wish to study the implications of these responsibilities can do so with proper detachment, with effective tutorial support, and without sensationalism. I know that my hon. Friend has personal knowledge of the college, and I feel sure he would wish to be associated with my tribute to the dedicated staff there. The Government's interest in and commitment to the work of the college has been shown by the visit late last year of my noble Friend Lord Belstead, the Under-Secretary.
I have also mentioned the key role of local authorities in planning and co-


ordination on the ground. Since 1972 particularly, the Home Office has issued a series of circulars, in the emergency services series, embodying guidance to local authorities both on its own behalf for matters in the Home Office field and on behalf of other Government Departments. Copies of these circulars, as many Members know, are in the Library of the House. Here I should like to pay tribute also to the work of the emergency planning teams which have been set up by the Greater London Council and by county councils, with the task of co-ordinating the preparation and testing of comprehensive plans drawn up in conjunction with the emergency services—the police, fire and ambulance services and other public authorities. Many county emergency planning teams also make use of local volunteers, in some cases down to parish level. The Government accept that this is a field where more encouragement can and should be given.
Our review will pay particular attention to the scope for encouraging the greater use of volunteer effort at local level within the framework of district and county council planning. I know that some hon. Members favour the resurrection of the Civil Defence Corps or some such similar national body. The Government are not persuaded that this is necessarily the best way in which to harness volunteer effort. It would be expensive, it would involve a large administrative and bureaucratic organisation and we are not convinced that it would be an improvement on locally organised effort. But we believe that voluntary effort needs to be harnessed at the grass roots to make the maximum use of existing local voluntary groups.
We shall naturally want to consult local authorities and those concerned about their particular contribution in this field when the review has determined the overall policy and strategy, and we undertake to engage in such consultations.
I hope my hon. Friend and the House will feel that I have responded constructively to the points he and my other hon. Friends have made and the arguments that have been advanced. The subject is of the utmost importance, and

the Government are treating it with the seriousness it deserves. We are proceeding with the review as rapidly as possible, and we shall need to consider its conclusions in the light of its public expenditure implications.

Mr. Banks: I am sure that the House welcomes the news that a fundamental far-reaching review is to be undertaken. Will my hon. and learned Friend give an indication as to how long he expects that review to take?

Mr. Brittan: That is the point that I was about to come to. My right hon. Friend hopes to announce the outcome soon after the House resumes after the Easter Recess.

Mr. Robin F. Cook: The Minister said at an early stage in his speech that he was reviewing the controversial stay-put strategy. Before he concludes his speech, will he give an indication as to whether the Administration are endorsing the stay-put strategy? We have read the document that he refers to, and we must accept that it refers entirely to protection against radiation and that there is little protection that could conceivably be given to urban populations against blast and fireball. The corollary of the stay-put strategy is that the population has no conceivable protection, however much the civil defence force is expanded.

Mr. Brittan: These are all matters that are being considered in the review. It is neither possible nor desirable to attempt to answer the hon. Gentleman's fundamental points now, even if we were able to. When the review is completed, we shall be in a position to do so. As I said, my right hon. Friend hopes to announce the outcome soon after the Easter Recess. I therefore hope that the House will appreciate that I shall take on board the points made so clearly by my hon. Friends and by the hon. Gentleman. I assure the House that all these points will be taken fully into account in the remaining stages of the review.

Question put and agreed to.

Adjourned accordingly at ten minutes past Twelve o'clock.